[House Hearing, 108 Congress]
[From the U.S. Government Publishing Office]



 
    H.R. 1, MEDICARE PRESCRIPTION DRUG AND MODERNIZATION ACT OF 2003

=======================================================================

                                HEARING

                               before the

                           COMMITTEE ON RULES
                     U.S. HOUSE OF REPRESENTATIVES

                      ONE HUNDRED EIGHTH CONGRESS

                             FIRST SESSION

                               __________

              LEGISLATIVE DAY OF WEDNESDAY, JUNE 25, 2003


             Printed for the use of the Committee on Rules







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0                           COMMITTEE ON RULES

                   DAVID DREIER, California, Chairman
PORTER GOSS, Florida                 MARTIN FROST, Texas
JOHN LINDER, Georgia                 LOUISE McINTOSH SLAUGHTER, New 
DEBORAH PRYCE, Ohio                      York
LINCOLN DIAZ-BALART, Florida         JAMES McGOVERN, Massachusetts
DOC HASTINGS, Washington             ALCEE L. HASTINGS, Florida
SUE MYRICK, North Carolina
PETE SESSIONS, Texas
THOMAS M. REYNOLDS, New York
                     William Pitts, Staff Director
                Kristi Walseth, Minority Staff Director
                                 ------                                

             Subcommittee on Legislative and Budget Process

                     DEBORAH PRYCE, Ohio, Chairman
PORTER GOSS, Florida                 LOUISE McINTOSH SLAUGHTER, New 
DOC HASTINGS, Washington                 York
SUE MYRICK, North Carolina           MARTIN FROST, Texas
DAVID DREIER, California
                                 ------                                

                Subcommittee on Technology and the House

                     JOHN LINDER, Georgia, Chairman
LINCOLN DIAZ-BALART, Florida         ALCEE L. HASTINGS, Florida
PETE SESSIONS, Texas                 JAMES McGOVERN, Massachusetts
THOMAS M. REYNOLDS, New York
DAVID DREIER, California






                            C O N T E N T S

                              ----------                              

                             June 26, 2003

                                                                   Page
Opening Statement of the Hon. Martin Frost, ranking minority 
  member of the Committee on Rules...............................     2
Opening Statement of the Hon. Louise Slaughter, a member of the 
  Committee on Rules.............................................     3
Opening Statement of the Hon. James McGovern, a member of the 
  Committee on Rules.............................................     4
Opening Statement of the Hon. Alcee Hastings, a member of the 
  Committee on Rules.............................................     5
Statement of:
    Johnson, Hon. Nancy, a Representative in Congress from the 
      state of Connecticut.......................................     8
    Walden, Hon. Greg, a Representative in Congress from the 
      state of Oregon............................................    11
    Thompson, Hon. Mike, a Representative in Congress from the 
      state of California........................................    19
    Allen, Hon. Tom, a Representative in Congress from the state 
      of Maine...................................................    20
    Langevin, Hon. Jim, a Representative in Congress from the 
      state of Rhode Island......................................    20
    Kanjorski, Hon. Paul E., a Representative in Congress from 
      the state of Pennsylvania..................................    21
    Tierney, Hon. John F., a Representative in Congress from the 
      state of Massachusetts.....................................    22
    Brown, Hon. Sherrod, a Representative in Congress from the 
      state of Ohio..............................................    35
    Sandlin, Hon. Max, a Representative in Congress from the 
      state of Texas.............................................    36
    Buyer, Hon. Steve, a Representative in Congress from the 
      state of Indiana...........................................    52
    Pallone, Hon. Frank, a Representative in Congress from the 
      state of New Jersey........................................    55
    Strickland, Hon. Ted, a Representative in Congress from the 
      state of Ohio..............................................    57
    Capps, Hon. Lois, a Representative in Congress from the state 
      of California..............................................    58
    Kaptur, Hon. Marcy, a Representative in Congress from the 
      state of Ohio..............................................    61
    Gutknecht, Hon. Gil, a Representative in Congress from the 
      state of Minnesota.........................................    62
    Emanuel, Hon. Rahm, a Representative in Congress from the 
      state of Illinois..........................................    63
    Burgess, Hon. Michael, a Representative in Congress from the 
      state of Texas.............................................    66
    Gingrey, Hon. Phil, a Representative in Congress from the 
      state of Georgia...........................................    67
    Weldon, Hon. Dave, a Representative in Congress from the 
      state of Florida...........................................    69
    Dooley, Hon. Calvin, a Representative in Congress from the 
      state of California........................................    76
    Tauscher, Hon. Ellen, a Representative in Congress from the 
      state of California........................................    85
    Hastings, Hon. Alcee, a Representative in Congress from the 
      state of Florida...........................................    86
    McGovern, Hon. James, a Representative in Congress from the 
      state of Massachusetts.....................................    92
Additional Material Submitted for the Record:
    Letter from the Honorable Edward M. Kennedy, Senator from 
      Massachusetts..............................................    23
    Memorandum provided by the Social Security Administration: 
      Legislative History: Vote Tallies for Passage of Medicare 
      in 1965....................................................    30
    Letter from Mr. William D. Novelli, Executive Director of 
      AARP.......................................................    40
    Letter from the Honorable Nancy Pelosi, Democratic Leader; 
      the Honorable Steny Hoyer, Democratic Whip; the Honorable 
      Bob Menendez, Chair, Democratic Caucus; the Honorable James 
      E. Clyburn, Vice Chair, Democratic Caucus; the Honorable 
      Martin Frost, Ranking Democrat, Committee on Rules.........    98


H.R. 1, MEDICARE PRESCRIPTION DRUG AND MODERNIZATION ACT OF 2003; H.R. 
  2596, HEALTH SAVINGS ACCOUNT AVAILABILITY ACT; H.R. 2559, MILITARY 
    CONSTRUCTION APPROPRIATIONS, FISCAL YEAR 2004; AND H. RES. 297, 
      PROVIDING FOR CONSIDERATION OF MOTIONS TO SUSPEND THE RULES

                              ----------                              


                        WEDNESDAY, JUNE 25, 2003

                          House of Representatives,
                                        Committee on Rules,
                                                    Washington, DC.
    The committee met, pursuant to call, Thursday, June 26, 
2003, at 12:50 a.m., in room H-313, The Capitol, Hon. David 
Dreier (chairman of the committee) presiding.
    Present: Representatives Dreier, Linder, Pryce, Diaz-
Balart, Hastings of Washington, Sessions, Reynolds, Frost, 
Slaughter, McGovern and Hastings of Florida.
    The Chairman. The Rules Committee will come to order. Thank 
you all very much for being here for this extraordinarily 
unusual early-morning meeting. As you know, we have had a 
pattern of trying to--we are going to wait overnight for 
Members to come in the morning, but since we had the prospect 
of 30-some-odd witnesses testifying on this very important 
issue, we felt it important that we proceed with our witnesses.
    We are here for consideration of three rules that will 
allow for consideration of the Medicare Prescription Drug and 
Modernization Act of 2003, the Health Care Savings and 
Affordability Act, and the military construction appropriations 
bill, and the rule to provide for consideration of motions to 
suspend the rules.
    As we begin, let me first call on the Ranking Minority 
Member Mr. Frost for some opening statements.
    Mr. Frost. Mr. Chairman, I am going to submit a full 
opening statement for the record.
    The Chairman. Without objection, Mr. Frost's statement will 
appear in the record.
    Mr. Frost. However, I would like to make some comments. 
This is a major example of major pieces of legislation being 
heard at outrageous times by this committee, outrageous in the 
sense that it is difficult for all the Members who want to 
testify, and it is, of course, difficult for the press to cover 
their testimony.
    When the new Majority took over and began this practice, my 
original assumption was that they were simply learning how to 
be a Majority Party. I later decided that they were simply 
incompetent. I reluctantly have now come to the conclusion that 
this is intentional, and that they have no interest of having 
substantive hearings at a time when Members of the House can 
testify and that they can be covered by the media.
    And, Mr. Chairman, I want you to know, this is one of the 
single most important pieces of legislation that will be 
considered this Congress and perhaps during any of our careers. 
And I consider this to be an outrage. And I want to serve 
notice that should the Majority conduct themselves in this way 
on another major piece of legislation while I serve as the 
Ranking Minority Member, I will recommend to our leadership 
that we do everything within the rules of the House to disrupt 
the proceedings and make it impossible for the House to 
proceed.
    The Chairman. Thank you very much, Mr. Frost.
    [The prepared statement of Mr. Frost follows:]

  Prepared Opening Statement of Hon. Martin Frost a Representative in 
                    Congress From the State of Texas

    The Republican leadership and this Committee have a well-documented 
record of rushing legislation through the House, often before anyone 
outside the Republican leadership--and that includes the press, the 
public or Members--has the chance to read the fine print.
    We saw the perils of this strategy last month after the 2nd 
Republican tax bill--what I call Part 2 of the Pioneers Enrichment 
Act--was signed into law. Many Republicans were embarrassed to discover 
that in their hurry to give millionaires $90,000 in tax breaks, they 
left out millions of working and military families.
    I mention this today because I want to sincerely counsel my friends 
in the Majority to avoid the temptation to employ their normal ``rush-
it-through-before-anyone-can-read-it'' strategy to pass their so-called 
prescription drug bill.
    No one outside the Majority leadership has seen the final 
Republican bill, but it's clear that Republicans are making a big, big 
promise to senior citizens. And it's equally clear that when seniors 
read the fine print, they will be very, very disappointed.
    For instance, they'll be shocked to discover that the plan 
Republicans call ``comprehensive'' actually contains a massive loophole 
for them to fall through. This ``donut hole'' provision--it's really a 
``sickness penalty''--means that the Republican plan abandons seniors 
when they need help the most, forcing them to pay all of their own drug 
costs between $2,000 and $4,900.
    Seniors will discover that when Republicans say ``Medicare 
reform,'' what they really mean is that they dismantle Medicare--
turning it over to HMOs and insurance companies--in the year 2010, just 
4 years after this prescription drug plan goes into effect.
    And they'll discover that when Republicans say coverage is 
``guaranteed,'' what they really mean is that they get health coverage 
as long as HMOs and insurance companies get big profits. And we all 
know that won't work--just ask the hundreds of thousands of seniors who 
have been dropped by HMOs over the past few years.
    My friends, senior citizens are going to be furious when they 
realize what a bill-of-goods you've sold them. They'll remember your 
promise to provide all seniors with guaranteed and affordable 
prescription coverage. And they'll notice--believe me, they'll notice--
that their premiums are higher, their choices are fewer, and their 
Medicare coverage has turned into an unreliable and expensive HMO plan.
    Frankly, I don't know how you'll explain it to seniors. I'm pretty 
sure that it won't be enough to repeat your mantra of ``promises made, 
promises kept.'' And you won't be able to say you warned them--unless 
you stop misleading seniors about your bill right now.
    That's why I strongly recommend that you allow the House to fully 
debate and fairly vote on every plan and substantive amendment 
submitted to the Rules Committee. And I strongly recommend that you 
give Members and the press adequate time to analyze the full text of 
your bill--once you finally make it available.
    That way, at least you can say that you didn't completely hide the 
details of your plan from the public. And then maybe, just maybe, you 
won't have a full-fledged senior-citizen revolt on your hands.

    The Chairman. Let me just observe that it appears to me 
that every seat assigned for the press corps is filled, and we 
have a complement of Members. There are three empty Member 
seats. All the other Member chairs are filled, and we have a 
table with two very able representatives from both the Ways and 
Means Committee and the Energy and Commerce Committee.
    So let me begin by welcoming my friend from Connecticut Ms. 
Johnson, and please proceed, and whatever prepared remarks that 
you have will appear in the record.
    Mr. Frost. We have some other Members who would like to 
make opening remarks.
    Ms. Slaughter. I would like to make an opening statement.
    The Chairman. Mr. Frost didn't indicate anyone else did.
    Ms. Slaughter. I would like to, if I may, because I am very 
much concerned. Mr. Frost had already pointed out this defies 
common sense that we would rush consideration of vitally 
important legislation affecting almost 40 million people. The 
final bill was filed an hour ago, and we hardly had to time to 
look to see what was in it, and certainly superficial at best, 
and heaven only knows what is buried in the fine print.
    Now, we are not naming a post office here. This is 
considered the largest change to Medicare since its creation. 
Every senior citizen in our Nation will be impacted by this 
proposal, and I think if they had any inkling how this Congress 
and committee worked, they would be outraged.
    The American people tell us time and time again they are 
profoundly disturbed with the rising costs of prescription 
drugs. I know it does nothing to address the skyrocketing costs 
of prescription drugs. It doesn't make it more affordable. And 
I am very curious to know if it still contains a portion of 
this bill that says that HHS is prohibited by this law from 
trying to negotiate for cheaper drugs.
    We believe the fact that the cost for most seniors is 
likely to rise. We don't believe that seniors want to 
privatize, and they saw what happened with Medicare+Choice. 
They are suspicious that drug programs modeled after that 
failed Medicare+Choice program will not address their immediate 
needs. You need to remember, too, that the Senate has worked on 
this bill for weeks, days of deliberation on the floor. We will 
have less than 3 hours.
    Because private industry 40 years ago didn't want to 
provide health insurance to older people, Medicare was born. We 
have no indication that anything has changed since then, and 
the private industry does not want to provide a prescription 
drug benefit for seniors. It is not a money-maker now, and it 
was not a money-maker then. In the 1960s, the private sector 
had no reason to create insurance plans.
    This legislation deserves a full and complete airing, and I 
am afraid we are not going to get it this evening. And I needed 
to express my concern that something of this magnitude would 
come to us an hour ahead of time and be at this hour in the 
evening when almost everybody is asleep. But I am pleased to 
see some witnesses here, but nonetheless I think we are 
shortchanging the American people.
    The Chairman. Thank you very much, Ms. Slaughter.
    Mr. McGovern.

 OPENING STATEMENT OF HON. JAMES MCGOVERN A REPRESENTATIVE IN 
            CONGRESS FROM THE STATE OF MASSACHUSETTS

    Mr. McGovern. Just for the record, you mentioned there were 
some Members here, but we have a long list of Members, and it 
appears that many of them are not here because of this late 
hour. So because we are meeting at this late hour, I think a 
lot of Members of both parties are not going to be able to 
participate in this hearing.
    And let me just say very briefly that I think this is a new 
low even for this committee, and the leadership on your side of 
the aisle, I think, has outdone itself, and that is hard to do, 
given what we have seen transpire in this House during these 
last several months.
    As my colleague has said, this House is about to consider 
an extraordinarily complex and controversial $400 billion bill 
that will affect the lives of 40 million Americans. I mean, 
every one of us here, no matter what our party affiliation, 
when we go home, we hear from our senior citizens all the time 
about the importance of trying to get a prescription drug 
benefit passed into law, something that means something. Now, 
the other body has spent 2 weeks of talking about this issue, 
debating and discussing and amending their prescription drug 
bill. They seem to get it that this is a big deal. Over 70 
amendments have been offered on the Senate floor so far, some 
40 hours of debate. They expect another 16 hours of debate 
before they conclude the deliberations. So how much time are we 
going to get to consider this important bill that all of us say 
is so important to our constituents? Not 2 weeks, not 40 hours, 
not 16 hours. We only get a few hours tomorrow on the House 
floor to do this under what most likely will be a very 
restrictive rule.
    When I asked the Chairman of the Rules Committee last night 
when as a Member of the House I could examine this unusually 
important bill which is about 692 pages, we are now told, I was 
told if I woke up early this morning, that I could just go 
online, and I could read this bill line for line. Well, I got 
up early this morning, and it wasn't there online; wasn't there 
this afternoon. In fact, at midnight it wasn't even online. So 
members of our staff were busily trying to go through a hard 
copy, trying to figure out what is in this bill and what is not 
in this bill, and quite frankly, we don't know what is in this 
bill. We don't know if there are any special fixes in this 
bill. We don't know what has changed. We don't know fully what 
the differences between the Ways and Means bill and the Energy 
and Commerce bill are.
    After 38 years Medicare has served this country pretty 
well. Most senior citizens think it is a pretty good program. 
After 38 years, we haven't messed around with the program, and 
here we are in the middle of the night in the Rules Committee 
about to report out a bill that, quite frankly, has significant 
implication for the future of Medicare because it is a bill 
that ends Medicare as we know it and turns it into a 
convoluted, complicated voucher program of HMOs and PPOs and 
shifting coverages. It is a bill that leaves a huge gap in 
coverage, penalizing people for getting sick. It is a bill that 
moves us toward privatizing Medicare and leaves our seniors at 
the mercy of the insurance industry. It is a bill that only a 
CEO would love.
    Now, given all of that, I guess it is understandable why 
the Republican leadership doesn't want anyone to see it or read 
it. What they want is to strong-arm just enough of their 
Members so they can ram this bill through the House and before 
the American people know what hit them.
    And I want to say another thing in this bill that I thought 
we had dealt with, given the fact that the Energy and Commerce 
Committee overwhelmingly rejected this provision, but in this 
bill, from what I understand, we have--there is a sick tax on 
senior citizens on a fixed income. They have implemented a 
copay on home health care. So all of you in this--in this 
committee who get up and give your speeches about how you want 
no new taxes on the American people, we will give an 
opportunity to vote on an amendment that I will offer, to strip 
the sick tax copay, that new tax on senior citizens, from this 
bill. And I would hope that, given the fact that the Energy and 
Commerce Committee overwhelmingly unanimously rejected that, 
that we should at least be able to have an opportunity to offer 
this on the floor.
    I want to conclude, Mr. Chairman. I think every amendment 
and every substitute brought before this committee should be 
made in order. We should have a debate on it. We should vote up 
or down on it. I don't care if it takes 2 weeks or 3 weeks or 4 
weeks. The people who are most affected by this legislation, 
our senior citizens, should know what they are getting, and we 
need to get this right. Thank you.
    The Chairman. Thank you very much, Mr. McGovern.
    Any other opening statements?
    Mr. Hastings.
    Mr. Hastings of Florida. Mr. Chairman, firstly, these are 
amendments--I don't have a copy of the 692-page bill, and I am 
curious, do any of the other Members on either side of the 
aisle have a copy of the 692 pages?
    Mr. Frost. I had one copy, which I have now been returned 
and loaned it to a Member to look at. I do have one copy.
    Mr. Hastings of Florida. Today's Washington Post--you don't 
have a copy in front of you, Mr. Chairman?
    The Chairman. Yes, I do, right here.
    Mr. Hastings of Florida. Martin's copy.
    Today's Washington Post had a comment from a gentleman 
whose last name is Urban. He says the politicians seem to say 
it is better than nothing, and we should be grateful. To some 
retirees here who clip coupons, follow the news, Washington's 
Medicare is just the latest example of the doings of out-of-
touch elitists.
    Mr. Chairman, I wish that tonight's hearing could be filled 
with commendation for the Chair and the Majority and all of us 
for reconciling two extremely contentious and technical bills 
into one. While you did accomplish such a task amongst 
adversity of two obviously--I am very delighted to have it for 
the good it will do me--what is the gentleman that died that 
wrote Exodus? It will be me like trying to read that when I was 
in the fourth grade. I understand the Chairmen from the Ways 
and Means and Energy and Commerce Committees are demanding 
persons, and rightly they should be as Representatives here.
    I should note that I am appalled, as I am sure a lot of us 
are, that the Rules Committee is forcing its members to meet 
within minutes of completion of this bill. The rules that this 
committee adopted on January 7, 2003, state that the Chair 
shall provide each member of the committee with a copy of each 
bill or resolution and any committee reports at least 24 hours 
before the time of the meeting. Now, this rule was established 
to ensure that we have adequate time to review the scheduled 
legislation.
    Rules Committee makes allowances for emergency meetings, 
but not once--except in an e-mail in my office received just a 
few moments ago from a constituent named Carl Keelman from 
Pompano Beach, wondering why he called and he wrote this time 
of night. I don't know him, but he wrote to me and said, Dear 
Representative Hastings: Please vote against the Republicans' 
Medicare reform proposal when it comes up for a vote this week 
in the House. Letting private insurance companies run Medicare 
is a terrible idea. In fact, I would say in the history of bad 
ideas, this one has got to rank near the top. Medicare has done 
a great job for 37 years. It has not dropped a single person 
from coverage. Private insurance companies are not able to 
guarantee coverage like Medicare can because they have to think 
about their profits first and the needs of seniors second. That 
is why Congress should not turn Medicare over to private 
insurance companies and HMOs. Seniors need coverage for their 
prescription drugs, but this bill would take us one step 
forward--not one step forward, but two steps backward. This is 
not a good deal for seniors. The drug coverage being offered is 
limited, and the bill would begin to unravel the Medicare 
program. Please vote against this legislation.
    I can tell Carl that I will live up to his request. When we 
established this rule, the Rules Committee made these emergency 
allowances, and I guess that is what we are having is an 
emergency hearing. I don't know what the hell the emergency is. 
We all have plenty of time, and as has been mentioned, the 
Senate seems to have found a way to give their membership 
sufficient time in order to at least discuss this 
intelligently. Members of this body, Members right in here on 
both sides of this aisle have spent years campaigning and 
discussing and debating a prescription drug plan under 
Medicare, yet almost immediately after the committees of 
jurisdiction completed their work in the 108th Congress, years 
of promises now run the risk of being slashed by the refusal of 
the Majority to allow members of the Rules Committee, the last 
committee standing before floor consideration, adequate time to 
review the bill and properly consider the many amendments which 
Members have submitted.
    Furthermore, many Members have sought to offer technical 
amendments that address specific amendments in this 
prescription drug bill. However, because the Majority refused 
to release the text of the bill until just an hour ago, Members 
have not had a fair opportunity to draft substantive amendments 
to the bill that will be on the floor. In drafting the two 
amendments that I may offer during this hearing, House 
legislative counsel could not even get me tentative text 
because, to quote one attorney at Counsel Office at 1:15 this 
afternoon, there is as of yet no firm target to amend.
    Tell me, Mr. Chairman, are we being honest to America's 
seniors by ram-rodding this bill through the Rules Committee 
this morning? Are we being honest to ourselves this morning 
considering a bill that none of us have read and few know its 
contents? And I doubt seriously if the people that patched and 
pasted it together, any of them on Commerce or any of the other 
committees, have a real firm grip on what is in this mess.
    I think the answers to these questions are self-evident. 
The little we do know about this bill is startling. For 
starters, this bill establishes a new voluntary prescription 
drug benefit, and we learned this in bits and pieces from each 
other, that will be provided through a private insurer. Yet 
Medicare was created in 1965 with not one Republican vote 
primarily because private insurers were not interested in 
offering health care policies to older, sicker people.
    Second, the $400 billion allocation for Medicare 
prescription drugs is not enough money to provide affordable 
benefits for our deserving senior citizens, period. And every 
man and woman in here that thinks $400 billion is going to get 
it, they haven't been living near my house where I take care of 
my mama, and it is $360 a week for prescription--$360 a month 
for prescription drugs, $850 a week for in-home care. And I am 
proud to be able do that, as I am sure many of you are, but 
there are people that live not too far from me and people that 
I represent that there is no way in the world that they could 
afford that kind of care.
    Third, this bill allows the IRS to share income tax 
information with the HHS, which can then share this information 
with the private insurer. This bill not only fails to provide 
adequate Medicare benefits to our Nation's senior citizens, it 
fails to provide adequate privacy protections as well.
    Mr. Chairman, based on the cursory information that has 
been battered about here on Capitol Hill, I have been able to 
go on this bill just with the time allotted those few things. I 
am certain there are countless issues in this bill that are 
worthy of careful attention and debate. It is a travesty that 
we are not permitted adequate time to give this important 
legislation the time and attention it deserves. We are doing 
ourselves and the millions of people that we all represent a 
great disservice. In short, this bill will help an already 
robust set of insurance companies at the expense of a whole 
whale of a lot of frail senior citizens, some of whom are 
mothers and our daddies and our grandpapas and our grandmamas. 
It is scandalous that we would put ourselves in this kind of 
position, and it doesn't mean so much that the Majority may win 
something. I think one damn day you are going to lose 
everything.
    The Chairman. Thank you very much, Mr. Hastings.
    Let me just say that this meeting does comply with the 
rules under the emergency meeting status.
    Mr. Hastings of Florida. What emergency?
    The Chairman. And based on the four statements we have 
heard from our four colleagues, there is a pressing need out 
there to deal with the issue of prescription drugs, and that is 
why in the last Congress we passed this measure--excuse me--
that is why in the last Congress we dealt with this issue, and 
that is the reason we are about to hear from our colleagues 
from the Ways and Means.
    Mr. McGovern. Would the Chairman yield?
    The Chairman. Mr. Linder.
    Mr. Linder. The statement that not a single Republican 
voted for Medicare is simply untrue, and I have a significant 
number of constituents who are grateful that at least some 
Congress is willing to offer some prescription drug benefit 
under Medicare for the first time in 38 years.
    Thank you, Mr. Chairman.
    Mr. McGovern. Would the Chairman yield?
    The Chairman. Please.
    Mr. McGovern. I would ask the Chairman to answer the 
question that Mr. Hastings put forward, and that is what is the 
emergency? What is the emergency that this needs to be done at 
this hour of the night, rushing it on the floor, versus doing 
it right and giving us a chance to go back to our districts and 
talk to our senior citizens and doctors and hospitals? I am 
trying to understand what the emergency is. How do you define 
an emergency; not the political spin, but what is the emergency 
that justifies us bringing this up at this hour under these 
kinds of circumstances?
    The Chairman. We all know that over the past several months 
that there has been a real attempt to try to put together 
legislation in a bipartisan way to deal with this pressing need 
that all four of our colleagues on the Minority here have 
outlined, and which we on our side agree exists. And we have 
come to the point where we have, we believe, fashioned a piece 
of legislation which will address that need. And it is for that 
reason that I as Chairman of this committee made the 
determination that we were going to call an emergency meeting 
to deal with this. That is my prerogative as Chairman of this 
committee, and I have done so.
    And I would like to recognize the gentlewoman from 
Connecticut Ms. Johnson, who is here representing the Committee 
on Ways and Means. And we are happy to have you. Without 
objection, any prepared remarks you have will appear in the 
record, and we welcome your presentation.

 STATEMENT OF HON. NANCY JOHNSON, A REPRESENTATIVE IN CONGRESS 
                 FROM THE STATE OF CONNECTICUT

    Mrs. Johnson. I thank you, Mr. Chairman, and as Chairman of 
the Health Subcommittee of the Ways and Means Committee, I am 
honored to bring this bill before the Rules Committee and 
respectfully request that the Committee on Rules provide an 
appropriate rule for floor consideration of House H.R. 1, which 
would waive all points of order against the bill and against 
its consideration. I would further request the bill be 
considered as read, and that you provide an appropriate amount 
of time for general debate equally divided, and one motion to 
recommit with or without instructions.
    Mr. Chairman, I would like to provide a brief overview of 
the bill and a brief set of changes that were made in the Ways 
and Means jurisdiction and yield to my colleague from Energy 
and Commerce for his comments and for his review of the changes 
that were made in the bill.
    First of all, to clarify, the House has passed legislation 
in this area two preceding times. We bring you a refinement of 
that bill. This is the most mature, well-thought-out 
legislation in this area that has ever come before the House. 
It is the first major expansion of Medicare, and it is not just 
about prescription drugs. That is what makes it different from 
any other initiative on the table in the Senate or by the 
Democratic Party. And I want you to understand the 
modernization in this, because this bill doesn't just bring 
prescription drugs to seniors, as important as that is, this 
bill modernizes Medicare and prepares it to deliver to our 
seniors the next generation of quality health care.
    Science has focused on diagnosis. It has focused on 
treatment. The most cutting edge development in health care is 
focusing on the progress of chronic illnesses, such as the 
progression through which someone goes from being a diabetic to 
dependency on dialysis. And it is the preventive initiative in 
this bill to prevent the progression of chronic illnesses that 
is unique and dramatic and is going to radically alter the 
lives of your constituents.
    One-third of Medicare recipients have five or more chronic 
illnesses, and Medicare is not structured to address those 
chronic illnesses or to support or help those patients. This 
bill provides fee-for-service Medicare the power to do that and 
will require that the plans do that. It will put in place both 
the technology and the medical science to help our seniors with 
chronic illness enjoy a much higher quality of life and at the 
same time stay out of hospitals, stay out of ERs, and stay out 
of doctors' offices, all of which are high-cost settings for 
Medicare. So it is the honest and right way to improve the 
quality of care Medicare is prepared to deliver and at the same 
time control its costs over the long term as we enter the era 
with the baby-boom generation.
    The prescription drug benefit is simpler, it is more 
generous, and it is fairer. It is simpler because it is 80 
percent of all coverage of up to $2,000 of costs. Considering 
that the average use of drugs is $1,200 per beneficiary, most 
seniors will be fully covered at 80/20 under this bill.
    Secondly, it income relates the catastrophic level. It is 
not fair in America that seniors with $200,000 of income who 
live in gated communities have exactly the same catastrophic 
threshold as someone living on $20,000 income. And that is not 
fair. And I am proud that this bill is fairer, its benefit is 
simpler, and its benefit is generous. It is well targeted to 
the low income, and for the first time in any bill, to my 
knowledge, we count the State subsidies toward the catastrophic 
limit so it not only targets the very poor, but also targets 
the really low-income seniors who would have a hard time 
meeting the catastrophic threshold. So it is better targeted 
both by virtue of its support for those 150 and 200 percent of 
poverty income and by virtue of the income-related catastrophic 
benefit; more generous, more fairly targeted, a strong benefit 
plan, the biggest expansion of Medicare in its history.
    Lastly, it mandates electronic prescribing in 2 years. This 
is going to have a dramatic impact on the infrastructure of 
medicine, but it is going to dramatically reduce errors. The 
Institute of Medicine report demonstrated that prescribing was 
the source of the majority of errors. It will also protect 
seniors from over-prescribing. It will protect seniors from 
interactions. And it will also give seniors the power to know 
when there is a cheaper alternative available that explicitly 
requires that pharmacists oversee the medication therapies that 
our seniors are on. If they are on multiple medications, they 
have to be on a medication therapy program, and it requires 
that the pharmacist get paid for that. It is a tremendous 
advance in not only giving seniors medication, but providing 
the oversight to ensure that they are a good thing in their 
lives and not a cause of illness, death and destruction.
    By mandating chronic care management and pharmacy therapy, 
the bill really goes a long way toward changing the dynamic in 
Medicare from an incident-based illness treatment program to a 
health-supporting preventive program. So I don't want you to 
miss what a dramatic expansion this is regardless of the 
circumstances under which we are considering the bill.
    In addition, it adopts the regulatory reform proposals that 
went through the House--the Senate never considered them--a 
radical reform, completely bipartisan, of the regulatory burden 
in Medicare that is draining hours away from patient care.
    It has a reimbursement package that includes the very best 
rural health reimbursement package ever to pass this House or 
ever to come before this House, as well as two dramatic 
improvements in hospital reimbursement. We changed the system 
to bring technology into the system more rapidly and pay for 
it, and we do a much better job of paying for outpatient drugs 
using hospital settings.
    We also attacked the issue of fraud and abuse. We have been 
paying for a lot of care that should have been paid for by auto 
insurance companies, and we save $9 billion through that 
reform.
    There are other aspects of this program that are 
interesting and useful. The ability of plans to compete in a 
way that will save seniors dollars will in the long run be a 
very great force for providing affordable care and efficient 
care to our seniors across the board.
    Let me highlight a few of the things that have changed in 
the bill since it came out of the Ways and Means Committee. We 
added a drug card in our jurisdiction as a result of the 
thoughtful consideration of many of our colleagues. So not only 
upon passage will the President have the authority to offer a 
drug card, but people who have less than 135 percent of income 
will get $800 to spend with that card. People between 135 and 
150 percent of income will get $500 toward drug costs. And 
people above 150 percent of poverty will get $100. So you get a 
smart card that moves right through from the discount card of 
your choice and behind it some real money, particularly if you 
are low income, to help with the cost of prescriptions in the 2 
years it will take to set up the program.
    There are other changes, but none of them major. I would be 
glad to go through them in more detail, but I don't want to 
take too much time.
    The Chairman. Thank you, Mrs. Johnson, and we appreciate 
your testimony. Thank you for those very thoughtful remarks 
which address many of the issues that have come forward in the 
last few minutes.
    Mr. Walden, we are happy to have you here representing the 
Energy and Commerce Committee. Without objection, your prepared 
remarks will appear in the record in their entirety.

  STATEMENT OF HON. GREG WALDEN, A REPRESENTATIVE IN CONGRESS 
                    FROM THE STATE OF OREGON

    Mr. Walden. Thank you very much, Mr. Chairman, Ranking 
Member Frost, members of the Rules Committee.
    Let me point out that the Energy and Commerce Committee, we 
spent nearly 23 hours working on this legislation in markup. We 
considered 63 amendments and held 28 recorded votes. So this in 
contrast to last year I believe we went 22 hours and had nearly 
as many amendments. So as my colleagues from the Ways and Means 
Committee said, this a major bill that has been well vented not 
only this year, but in the prior 2 years by the Energy and 
Commerce Committee and the Ways and Means Committee.
    Our committee worked very closely with the Ways and Means 
Committee to make major improvements that passed the House last 
year. One of the most significant changes we made was to 
improve the drug benefit. We substantially increased the amount 
of coverage beneficiaries receive for their 2,000 in drug 
spending. They will now only pay 20 percent of these drug costs 
after paying a $250 deductible. This change and others make our 
proposal an even more attractive benefit for seniors who are 
Medicare beneficiaries.
    H.R. 1 also provides beneficiaries more options for 
receiving their health care. Building on the recommendations 
first proposed by the President, the bill gives seniors the 
full array of health plan choices available to the under-65 
population including PPOs, HMOs and private fee-for-service 
plans, along with the option with remaining in the traditional 
Medicare program. So they have choices.
    This bill creates enhanced fee-for-service regions 
encompassing both urban and rural areas for the delivery of new 
private plan options, thus bringing improved choices to seniors 
throughout the country; also takes important steps towards 
reforming the Medicare program, as my colleague said. The base 
bill also retains the best features that were combined in the 
version passed last year by the House because our bill allows 
beneficiaries to harness competitive free market forces to 
substantially lower Medicare beneficiaries' drug costs.
    The bill also provides substantial assistance to low-income 
beneficiaries, providing full subsidies for beneficiaries with 
incomes up to 135 percent of poverty level, and covers a 
portion of the premiums on a sliding scale to beneficiaries 
with incomes of 150 percent of poverty.
    Further H.R. 1 contains amendments to the Hatch-Waxman 
generic drug law that will benefit all Americans, not just our 
seniors, by expanding--by expediting, that is, the arrival of 
generics in the marketplace. The language in the bill, which is 
similar to that proposal passed by the Senate 94 to 1, would 
provide brand drug companies with only one 30-month stay on the 
approval of a generic competitor. And, of course, generics 
would forego their exclusivity if they do not bring a product 
to market within a specified time period. These reforms will 
save billions of dollars to American consumers.
    Mr. Chairman, if I could touch just on a few items here as 
they differ from the committee mark. As I mentioned, Hatch-
Waxman changes, including new changes as similar to that 
proposed by the Senate, which I just referenced. There is a re-
importation provision that has been added; contains provisions 
that provide the Secretary with the authority to prevent 
reimportation and the personal importation of FDA-approved 
drugs from Canada. Unlike current law, these provisions are 
more likely to go into effect because they provide FDA with the 
authority to regulate the flow of reimported drugs to 
designated ports of entry for the FDA to concentrate its 
inspectors.
    Canada-only reimportation: This provision requires HHS to 
issue regulations allowing pharmacists and wholesalers to 
reimport drugs that comply with the FDA standards. The 
provision provides that biologics, controlled substances and 
certain other drugs are exempted. Drugs must be contained in 
tamper-resistant and counterfeit-proof packaging. Drugs must 
contain a statement to inform the consumer that the drug has 
left the country. Drugs may only be shipped back to the country 
by the first Canadian recipient. HHS is given the authority to 
limit reimportation to certain ports of entry; import 
requirements to keep detailed records and to conduct drug 
testing; a manufacturer must provide an importer with an 
approved labeling of the drug. In the Canada-only personal 
importation provision, it allows the Secretary to waive the 
prohibition on personal importation of drugs from Canada when 
the drugs are for personal use and when drugs are presented at 
the border. This activity is presently illegal under the Food 
and Drug Act, but could become legal under this act. The 
provision provides that drugs must be in the possession of the 
individual when entering the United States. They must be for 
personal use for that individual with a valid prescription, and 
drugs must be FDA-approved and in final dosage form.
    In reference to the discount drug card, I would also, 
adding to what my colleague from the Ways and Committee said, 
point out that in addition to the money that would be pointed 
into these accounts, individuals, employers and charitable 
organizations will be able to contribute up to $5,000 annually 
to this card. This program terminates when the comprehensive 
drug benefit comes online in 2006.
    There are also changes to AWP, Medicaid, and of course we 
are proud of the improvements in the rural health policies. 
This is very good for rural communities when it comes to rural 
health.
    And with that, Mr. Chairman----
    The Chairman. Thank you very much, Mr. Walden.
    And let me say to both of you that the proposal that you 
have just outlined clearly does protect and strengthen and 
improve on the Medicare program, which we all know has faced 
many difficulties over the past several years. And obviously, 
if action is not taken, we know that the future of Medicare is 
seriously in doubt. And the proposals that you have just 
brought before us, I believe, will go a long way towards 
mitigating the threat of that.
    I thank you both very much for going through the litany of 
proposals that were offered here today, that were offered in 
your committee.
    Mr. Linder.
    Mr. Linder. I want to thank you both. You are bringing 
before us the first opportunity in its lifetime for Medicare to 
offer a drug benefit for seniors.
    I just have one question: Do you consider having seniors 
paying a modest copay to be a sin tax?
    Mr. McGovern. On health care?
    Mrs. Johnson. No, I don't. I feel it is important for 
seniors to make some copayment, because if they don't, they 
lose track of the cost, and they lose track of their 
responsibility to think about whether a lower-cost alternative 
is available. It is extremely important to have copayments, and 
in this bill we do not allow the sharing of the total amount of 
the copayment.
    Mr. Linder. Isn't it true that one thing we can do to get 
some control over health care costs in this country is to have 
some kind of consumer involvement or patient participation? And 
isn't that what copay is designed to do?
    Mrs. Johnson. There are two things that are going to get 
people very powerfully involved. Copayments are certainly one 
of them, but one of the important aspects of disease management 
is that the patient is very involved, and part of what you do 
is to educate the patient about how to care for themselves, 
educate their family and support group, keep much closer 
contact with them, provide technology in the home that 
supports. So the patient involvement is what makes that such a 
powerful approach to preventing illness from progressing.
    So this is going to dramatically alter the way we do health 
in America because our senior population is going to be able to 
participate in the kinds of delivery systems that today, 
themselves, are key to their own health.
    Mr. Linder. In 1964, when President Johnson was outlining 
his proposed Great Society for Medicare and Medicaid, he 
promised this country that by 1990, Medicare would only cost $9 
billion, and Medicaid would only cost $1 billion, using easily 
quantifiable user statistics. And we discovered that by 1990, 
Medicare cost about 108 billion, and Medicaid cost 73 billion, 
because people don't spend other people's money as wisely as 
they spend their own.
    Isn't the whole idea of copay to get the patient involved 
in those decisions and understand they are spending their own 
money, too?
    Mrs. Johnson. Absolutely. But there is another factor. He 
did not anticipate. He did not anticipate the rapid progress of 
medical science. It is astounding what we have learned in the 
last 30 years, and that expansion, explosion really, of 
diagnostic techniques, of treatment techniques, of surgical 
options that are pushing costs up, and now prescription drugs, 
that makes it even more important that the patient be involved, 
because we all know there is unnecessary surgery being done 
because the patient isn't part of the decision-making process. 
We know that overprescription is one of the biggest dangers of 
the prescription drug plan for seniors, and unless they are 
more involved in their care, their use of pharmaceuticals, and 
they have the guidance--on the part of multiple 
pharmaceuticals--of a pharmacist, they will be victims of 
overprescribing, overusage, and all the problems that result 
therefrom.
    Mr. Walden. Mr. Chairman, if I might as well. This whole 
issue of copay is an interesting one because when Part B 
Medicare was begun, it was a $100 copay. That represented 44 
percent of the cost. Today it represents less than 3 percent of 
the cost. So if you look at this as how the program was started 
versus how it is today, the percent of copay is negligible in 
terms of Medicare Part B compared to how the authors, founders 
and supporters of Medicare envisioned copay to work when it was 
created in the 1960s.
    Mrs. Johnson. We do require everybody to have a copay, even 
people on Medicaid, $2 copay and $5 for prescription. So we 
want everyone to participate in this program both financially 
and personally.
    Mr. Linder. Worth noting that when the VA finally decided 
to have copay for its pharmaceutical program, the numbers of 
prescriptions declined dramatically.
    Mrs. Johnson. I would like to point out to the gentleman 
Mr. Hastings on this copay for home health----
    Mr. McGovern. I was the one who raised it.
    Mrs. Johnson. I have been a long and close strong advocate 
of the home health industry, and I fought copays for many years 
because it was per visit. Now we have changed the way we 
reimburse for home health visits. We are reimbursing per 
episode. A single copay for episode does give seniors the 
opportunity to think whether this is appropriate or not. And I 
have had seniors walk up to me and family members, walk up to 
me and say, we could do this ourselves, and we decided not to 
do it because of the copay. This was actually in regard to 
home-delivered meals, but it was the same thing. The home-
delivered meal copay was at $5 for the week, and you were 
getting both lunch and dinner. And this retired friend of mine 
on the local council said, for that I will do it myself.
    Well, we need to at least promote that thought. So for a 
single copayment of 1.5 percent, we will be able to give people 
the opportunity to think do they need home health care. You 
will be surprised how much of Medicare is on automatic pilot. 
You get out of the hospital, they give you all this equipment 
whether you need it or not, and then line you up for home 
health care whether your children are there or not. So copays 
represent an opportunity to think about whether I am going to 
pay for this and taxpayers are going to pay for this.
    Mr. McGovern. But----
    The Chairman. Mr. McGovern, Mr. Frost has just asked that I 
go in regular order, and so I plan to do that.
    Mr. Linder.
    Mr. Linder. Thank you for clarifying the copay idea and its 
importance in terms of the responsibility part. And I would 
like--when you talk to, for instance, pharmacists at a 
hospital, and you talk about when they go in to see a patient, 
they will say the first thing is they take them all off their 
medicine. They are overmedicated, and they are overmedicated 
because they are not responsible for paying for things.
    I congratulate you on what you are doing and congratulate 
you on the responsibility portion.
    Mrs. Johnson. They are overmedicated because they are not 
paying, but also because there is no communication amongst 
their caregivers. And by having electronic prescribing and a 
single plan, some plans will know exactly all the 
pharmaceuticals you are taking. This is a vast improvement. You 
can't provide prescription drugs without providing to that 
senior in a sense a single point of the payment so we know 
exactly what complex of drugs they are getting.
    The Chairman. Mr. Frost.
    Mr. Frost. Mr. Chairman, I am going to be fairly brief 
because we have a lot of witnesses here who waited a very long 
time tonight to have the opportunity to testify, and I do know 
other members of the committee have questions.
    I do have a question, and either witness can respond. The 
question is we repeatedly hear from members of your party that 
the drug plan will have a monthly premium of $35. Can you point 
me to the section in your bill where it guarantees that all 
seniors' monthly premiums will be $35? Is there anything in 
statute, statutory language, that sets out the premium at $35?
    Mrs. Johnson. There is nothing in statutory language that 
sets out the Part B premium, and there is nothing in the 
statutory language that sets out the drug premium. However, 
there is in statutory language not only the actuarial 
equivalence for the whole package, but section by section. So 
if anybody wants to vary from 80/20 in the distribution of 
cost, they can do that, but it has to be actuarially 
equivalent.
    So it is hard to see how much variation there will be. 
Section by section there has to be equivalency. So the 
likelihood when the actuaries look at this that there will be a 
consistent premium is very great. But you see if we set it in 
statute, then we don't allow those plans that are more 
efficient or if they can negotiate a better deal with the 
manufacturer to charge you less, and we want seniors to have 
access to a plan that charges less.
    Mr. Frost. I understand this. My understanding is when 
proponents of the bill are attempting to sell this package to 
the public and Congress, they say there will be a $35 premium. 
Is it possible in the way that the bill is fashioned that that 
premium can be higher than $35 a month, not necessarily lower?
    Mrs. Johnson. It is possible that it could be slightly 
higher or lower. It is impossible that it would be 
significantly higher or, frankly, significantly lower.
    Mr. Frost. Well, that is a debatable matter, and that issue 
will be discussed more fully on the floor, and you responded to 
my question that there is nothing in the statutory language 
that sets out a $35-a-month fee.
    Mrs. Johnson. Precisely.
    The Chairman. Ms. Pryce.
    Ms. Pryce. Thank you, Mr. Chairman.
    I have been very involved in this over the last couple of 
weeks, and I just want to commend our witnesses today and their 
committees for working so closely together. I think this is 
something that is historic as long as I have been around here, 
and the cooperation and--to bring this together, this complex 
matter, the way they have done it, I want to commend them. And 
I will not take up the committee's time with any questions. I 
want to thank them very much and tell them we all appreciate 
it.
    The Chairman. Thank you very much, and thank you, Ms. 
Pryce, in your leadership role in making this happen.
    Ms. Slaughter.
    Ms. Slaughter. Mr. Chairman, I only have three questions 
that I would like to ask; first, that I am told that on the 
reimportation of drugs section there is an amendment by Senator 
Cochran that the Secretary must certify the safety of the 
importation of drugs in order to have it go into effect. And 
Secretary Thompson has said he will not do that, and in which 
case this is not really going to happen. Is that true?
    Mr. Walden. If I might, Mr. Chairman. In the past, neither 
Secretary Shalala nor Secretary Thompson can certify the 
importation to be done safely. It will be much easier for a 
Secretary to demonstrate safety by limiting the reimportation 
in Canada only. And as I outlined in the bill, there are some 
safeguards built in.
    Ms. Slaughter. And the Secretary has agreed to do that?
    Mr. Walden. I can't speak for the Secretary.
    Ms. Slaughter. My concern is that was one of the sweeteners 
in the bill. There is no question about it, because most of us 
think what we need to do is really get down the price of drugs. 
And I understand that the drug manufacturers object most 
strenuously to even bringing it in from Canada. But it was 
troubling to me if that provision is in the bill--stated in the 
bill, and the Secretary won't do it, then we are wasting our 
time talking aboutthat; are we not?
    Mr. Walden. If I might, Mr. Chairman.
    As you know, I am Vice Chairman of the Oversight and 
Investigations Subcommittee, Energy and Commerce Committee. We 
had a hearing just this week--it seems last week--this week on 
this issue of reimportation with experts from the FDA and the 
Customs Department, complete with slides, pictures and evidence 
of very extensive pharmaceutical drugs. And I must tell you 
that one of the packages of evidence had a series of five boxes 
of drugs that I am led to believe are used for HIV. Price tag 
is $4,000 for those five boxes. They were sealed with hologram 
seals. They were identical to one box in another bag. I 
presumed the five with the hologram seals and the printing and 
all were the correct imports. They were knock-offs. And they 
had pile after box after pile, and I am telling you could not 
tell the difference. And I think there is a legitimate issue.
    And I supported the issue of reimportation. I voted in 
favor of it, but I also believe that we must make sure our 
seniors and anybody else that goes to a Web site, who thinks 
that they are getting a drug to combat an illness that could 
threaten their life, knows with some level of certainty that 
those drugs actually have in them what they could get if they 
went to the corner drugstore. And that is why this has been 
framed in a way to try achieve that, so they are not getting 
rat poison when they expect something like Viagra.
    Mrs. Johnson. There is a difference in this bill.
    Ms. Slaughter. However, the proviso, unless the Secretary 
certifies it. Therefore, that section of this bill cannot take 
effect; isn't that correct?
    Mrs. Johnson. That is correct, but there are two different 
structural aspects to this bill that make it likely he will be 
able to do that. First of all, it requires tamper-proof 
packaging. And there are tremendous advances now, very tiny 
chips that get put in, so on and so forth. We think there are 
packaging alternatives that will allow inspectors at these 
gates to be able to quickly determine counterfeit from 
noncounterfeit. This is a new advance. We have encompassed that 
advance in this bill, and we think this is a workable 
compromise that the Secretary could put in place.
    Ms. Slaughter. One other point I wanted to bring up, too, 
is the cost of Part B, the rise in premium. The bill in 2000 
said that the premiums for Part B would rise 47 percent. There 
is no figure.
    Mrs. Johnson. In Part B. I don't know where they got that 
47 percent.
    Ms. Slaughter. 2000 bill, not this one.
    Mrs. Johnson. We do allow in this bill for the Part B 
premium of--excuse me, Part B deductible of $100 to increase 
with inflation. It is essential we get Medicare on a sounder 
track, and that is one of the small things we do.
    Ms. Slaughter. I think we all----
    Mr. Walden. If I might. Again, on that issue, I believe the 
$100 fee was established in the 1960s as the copay or the 
deductible, and at that time represented 44 percent of the cost 
of what was being provided. Today that figure is less than 3 
percent, so in terms of just keeping up with inflation, you 
have to have a much higher rate.
    Ms. Slaughter. But it is not in the bill. There is no 
stated amount.
    Mr. Walden. No. It is a rate of inflation.
    Ms. Slaughter. One of the questions is the issue of 
negotiation between the private Medicare plans and the drug 
companies. Can you explain why that is--why they don't want to 
negotiate lower prices?
    Mrs. Johnson. It prohibits what?
    Ms. Slaughter. Prohibits the MBA from negotiating with--
interfering into drug negotiations, price negotiations.
    Mrs. Johnson. We want the plans to negotiate with the drug 
companies. The plan that they come up with has to be reviewed 
and certified by the board that runs the program, but they are 
to do the negotiation. We are not to do the negotiation.
    Ms. Slaughter. Given the fact that the Veterans' 
Administration has negotiated and has been successful, it seems 
odd that the administrator of the program is being prohibited 
by law from interfering.
    Mrs. Johnson. But you are not going to get diverse and 
competitive programs, some of which will then drive the price 
down. The VA has a very good price on a narrow spectrum of 
drugs, but it gets the good price because it is a narrow 
spectrum. If you are a veteran that needs a drug that is not 
given by the VA, you don't get any break at all.
    We want seniors to get a break on every single drug. So 
that is an interesting model, but there are two ways in which 
we go beyond it. First of all, our program will offer a much 
greater variety of drugs. And secondly, by piercing what is 
called the best price law that requires that the best private 
sector price be passed on to Medicaid, we save $18 billion. We 
are going to depress drug prices through the bringing Medicare 
to the market in a way that is absolutely unprecedented. We 
will go below the current best price structures, which build an 
artificially high floor into current pricing processes.
    Mr. Walden. We are going to harness 40 million Medicare 
beneficiaries in this competitive effort. It is what is 
happening in the private sector in private insurance today that 
drives down the cost of what they are paying. And we believe 
you will be able to achieve anywhere from 15 to 30 percent 
reduction, depending upon the drugs, in just the base cost to 
the drugs as a result. So even though you are paying the part 
that is out of your pocket, you are going to pay less. Then you 
couple that with the insurance 80/20. We think seniors are 
going to see a significant reduction than certainly what they 
are paying today if they have no coverage.
    Ms. Slaughter. These are the seniors that opt out of 
Medicare?
    Mrs. Johnson. No. No. In fact, the requirement is that in 
every area there be a plan that is drug only, as well as a plan 
that can be a plan.
    Ms. Slaughter. Negotiated between private plans, not 
Medicare?
    Mrs. Johnson. No. Medicare doesn't do the negotiating. But 
Medicare has to certify the plan once it is negotiated, that it 
meets our actuarial specifications and the standards of the 
plan. But we do not do the negotiation on purpose, because we 
want multiple plans. That is the whole point. We want seniors 
to have choices. That way they get lower premiums, lower cost, 
lower prices.
    Ms. Slaughter. Thank you.
    The Chairman. Thank you very much, Mrs. Slaughter. Let me 
just say that we all share your concern to ensure that no one 
gets rat poison when they are anticipating Viagra.
    Mr. Walden. It is a possibility, Mr. Chairman.
    The Chairman. Mr. Diaz-Balart.
    Mr. Diaz-Balart. I thank you, Mr. Chairman. I thank these 
two witnesses for bringing this work product forward. It is 
tremendous work that these committees have done, and I am very 
proud that it is this Congress.
    This is something that can't be stressed enough; right now 
there is no benefit, and the fact that we in this Congress--
this Congress is going to provide an important benefit to help 
seniors pay for their medicines, I think is extraordinary, 
something that we all should be proud of.
    I am not going to take the committee's time further, I but 
I wanted to thank you for their hard work and the reputation of 
the committee for their very appropriate, illustrative 
descriptions.
    The Chairman. Thank you.
    Mr. McGovern.
    Mr. McGovern. Thank you, Mr. Chairman.
    Mr. Chairman, first I would like to ask unanimous consent 
to insert into the record the testimony of Congressman Mike 
Thompson, the testimony of Congressman Tom Allen of Maine, the 
testimony of Congressman Jim Langevin of Rhode Island, the 
statement of Congressman Paul Kanjorski, and the testimony of 
Congressman John Tierney, all who have amendments, but I guess 
couldn't make it here at 10 of 2:00 in the morning.
    The Chairman. Without objection, the statements of our 
colleagues will appear in the record at this point.
    [The prepared statements of Mr. Thompson, Mr. Allen, Mr. 
Langevin, Mr. Kanjorski, and Mr. Tierney follow:]

Prepared Statement of Hon. Mike Thompson, a Representative in Congress 
                      From the State of California

    Last night, the Blue Dog Coalition formally endorsed legislation 
based upon the bipartisan Senate Medicare bill (S. 1). We are bringing 
this proposal before Rules tonight as an alternative to the House 
Republican plan.
    As you know, the Blue Dogs are a group of fiscally conservative 
Democrats, who are committed--as a coalition--to the passage of a 
prescription drug benefit that fits within our $400 billion budget 
window.
    However, we are not willing to sacrifice the principles of the 
Medicare program to reach that goal.
    The Senate has come together to develop a strong bipartisan 
benefit. It is not perfect. But, in recent years, the perfect has 
become the enemy of the good and, unfortunately, the perfect is out of 
our price range.
    The Senate offers America's seniors a good benefit. It carries a 
monthly premium of $35. A deductible of $275. A 50% cost-share through 
the first $4500 of drug spending. And, it offers a catastrophic benefit 
that kicks in after beneficiaries have spent $3700 out of pocket.
    Further, it corrects a variety of inadequacies in our Medicare 
reimbursement system for rural providers. And, it does all of this 
without putting Medicare on the path to privatization.
    But, with a score of $389 billion, there was some room for 
improvements. And, that is just what the Blue Dog Coalition has done.
    We have strengthened the rural provider package by accelerating the 
start dates to 2004. And, we have improved the adjustments made to the 
wage index labor share--dropping the labor share to 62%.
    We have built upon the Senate's critically important fall-back 
provisions. The fall-back means that seniors--such as those living in 
rural areas without two or more plans providing service--will always 
have access to a drug benefit. We have provided an additional layer of 
stability for those seniors, by requiring the fall-back plans to 
contract for two years as opposed to one. We have included the Senate 
Generic drug amendment, which has been scored by CBO as a cost-saver 
because it streamlines and clarifies the process by which generic 
medications can be brought to market. This will increase the amount of 
affordable medications available to all of our seniors. We have 
incorporated disclosure requirements, to ensure that our plans are 
fully demonstrating how savings are passed on to our beneficiaries. We 
allow the Secretary to negotiate on behalf of all Medicare 
beneficiaries for the best prices possible. We permit the re-
importation of medications from Canada, provided that the Secretary 
certifies that such action would not jeopardize the health and safety 
of the American public. We allow Medicare to operate as the primary 
payor for all dually eligible beneficiaries, lifting some of the 
financial burden off of the shoulders of our states. We allow a portion 
of employer contributions to be counted towards the beneficiary out of 
pocket limits, encouraging our employers to continue sponsoring retiree 
health plans. And we are able to make these improvements within the 
confines of the $400 billion budget allocation.
    Unfortunately, the Congressional Budget Office was not able to 
complete a score on our legislation prior to the convening of the Rules 
Committee. However, the majority of the changes we have made to the 
already-scored Senate bill were based upon Senate amendments that have 
either been introduced and passed or are pending introduction. As such, 
they have all been scored by CBO for their sponsoring offices. The 
availability of that information has allowed the Blue Dogs to say with 
certainty that this legislation fits within the $400 billion budget 
window.
    We know that the Committee would have preferred that CBO underscore 
our claims. We would have preferred that as well. So, to lie to rest 
any lingering worries the Committee may have about the final cost of 
our legislation, we have incorporated a budget safeguard within this 
Substitute.
    Specifically, the language requires the Secretary, in consultation 
with OMB, to determine the exact cost of this legislation prior to 
enactment. The Secretary is specifically directed to adjust the 
percentage of employer contributions that are applied towards the out 
of pocket limit accordingly--if necessary--to ensure that the 
legislation will not exceed the specified allocation.
    I respectfully request that this Committee give the Blue Dog 
Substitute its full consideration. On behalf of the entire Blue Dog 
Coalition, which has formally endorsed this proposal, I urge you to 
allow a debate of and a vote upon this Substitute on the floor of the 
House of Representatives.
                                 ______
                                 

Prepared Statement of Hon. Tom Allen, a Representative in Congress From 
                           the State of Maine

    Thank you, Mr. Chairman. This amendment is designed to provide 
doctors with valid, evidence-based information on how drugs that treat 
particular diseases and conditions compare to one another. It will 
ensure that physicians and their patients have access to credible, 
unbiased, evidence-based data on the comparative-effectiveness and 
cost-effectiveness of prescription drugs.
    This amendment is based on H.R. 2356, the Prescription Drug 
Comparative Effectiveness Act of 2003, a bipartisan bill which was 
introduced by Representative JoAnn Emerson and me, along with five 
Democratic and five Republican original cosponsors on June 12. The 
amendment requires the National Institutes of Health (NIH) to conduct 
research, and the Agency for Healthcare Research and Quality (AHRQ) to 
conduct studies, on the comparative effectiveness and cost-
effectiveness of prescription drugs that account for high levels of 
expenditures or use by individuals in federally funded health. In 
addition, the amendment directs AHRQ to submit an annual report to 
Congress delineating its findings and make the report publicly 
available on the internet. This amendment does not create a formulary. 
It does not restrict access. Rather, it provides more information to 
doctors and consumers.
    This amendment provides a sound, bipartisan approach to a 
fundamental challenge: to ensure that our prescription drug spending is 
based on evidence-based research and not the latest television ad or 
marketing campaign in doctor's offices. Currently, drug companies 
promote their drugs as safer or more effective than competing drugs, 
but this promotion is too often based on poorly designed studies or 
other questionable sources of information.
    The FDA is responsible for determining safety and effectiveness of 
prescription drugs (does the drug treat the condition its label says it 
treats), but there is no government entity responsible for examining 
the comparative effectiveness of prescription drugs (e.g., is drug A 
more effective at treating a particular condition than drug B). FDA 
judges the effectiveness of drugs compared to a placebo but does not 
ordinarily make judgments about the comparative effectiveness of drugs 
for the same indication, nor does it take into account relative costs.
    This type of evidence-based review is happening at the state level, 
with the state of Oregon leading the way. Beginning in 2001, the state 
of Oregon implemented evidence-based review of drug effectiveness in 
its Medicaid program. To date, the program has examined five classes of 
drugs, including non-steroidal anti-inflammatories; long acting opiate 
analgesics; proton pump inhibitors for treating heartburn/acid reflux; 
statins for lowering cholesterol; and estrogens for treatment of 
menopausal symptoms and prevention of low bone density and fractures. 
Oregon has seen reductions in drug spending in their Medicaid program 
of almost 5 percent, and Michigan, with a similar program, has seen 
overall savings of nearly 10 percent. Several states plan to develop 
programs similar to Oregon's, including North Carolina, California, 
Idaho, Washington, and Arkansas.
    The amendment recognizes that doctors need a range of treatment 
options in order to make informed choices based on individual patient 
needs. The amendment would ensure that physicians have access to 
objective, evidence-based, non-biased information on which drugs are 
likely to be most effective at treating a particular condition. I urge 
the committee to adopt this amendment.
                                 ______
                                 

 Prepared Statement of Hon. Jim Langevin, a Representative in Congress 
                     From the State of Rhode Island

    Mr. Chairman, I feel it is essential that we allow the bulk 
purchasing power of 40 million Medicare beneficiaries to be used to 
lower the high cost of their prescription medications. As this bill 
expressly forbids the Administrator of the prescription drug benefit 
from doing that, I am before you today to ask that the Members of our 
chamber have the opportunity to vote to remove that restrictive 
language.
    Like many other parts of the country, my home state of Rhode Island 
uses bulk purchasing power of seniors eligible for Medicaid to 
negotiate discounts for this population. This program has met with a 
great deal of success. Eligible Rhode Island seniors are able to 
purchase prescription medications at a price negotiated by the state, 
which is currently 13 percent below the average wholesale price. 
However, due to financial constraints, the program can only cover a 
portion of the cost, and many seniors find themselves just above the 
income cap and ineligible for any assistance.
    Here we have a situation with over 40 million people with a common 
and basic need, yet instead of taking advantage of that purchasing 
power to negotiate lower prices for the most rapidly increasing 
component of health care costs, the federal government is actually 
considering outlawing that practice. America's seniors have made it 
clear that they want the government to assist them in obtaining their 
prescription drugs at a fair price. The Secretary of the Veterans' 
Administration and the Medicaid programs have the authority to use the 
bulk purchasing power of their constituencies to negotiate lower 
prices. Seniors without access to the VA or to Medicaid, who rely on 
Medicare, deserve no less.
    Earlier this week, I joined with the Rhode Island Academy of Family 
Physicians in releasing a survey showing that a third of seniors in 
Rhode Island are relying on physician samples for their necessary 
medications and 20 percent are failing to take them as prescribed 
because of cost--skipping prescriptions to make them last longer and 
failing to refill them. The survey reiterates what we already know--
that cost is the greatest barrier to seniors taking their 
prescriptions. These issues are not unique to Rhode Island, and this 
situation will not fix itself. An analysis of H.R. 2473 by the 
Consumer's Union shows that national spending on prescription drugs 
continues to grow, and if we don't take action to curb costs now, 
seniors will pay more out of pocket in 2007 with the prescription drug 
benefit than they are paying in 2003 without it. All Members of the 
House of Representatives should be given the opportunity to vote on an 
amendment that would open the door for the government to take action to 
lower drug prices for our seniors. By forbidding cost control, we 
essentially take the meaning out of the benefit we have fought to offer 
our seniors for so long.
    Mr. Chairman, I thank you and the Committee for considering my 
amendment and for the opportunity to testify this evening. I am happy 
to respond to any questions you might have.
                                 ______
                                 

   Prepared Statement of Hon. Paul E. Kanjorski, a Representative in 
                Congress From the State of Pennsylvania

    Mr. Chairman and Members of the Committee, I appreciate the 
opportunity to offer my thoughts about competitive bidding for durable 
medical equipment. This issue is of great concern to the people of my 
Congressional district in Northeastern Pennsylvania.
    As you consider the Medicare reform legislation before you, I urge 
to remove the provision authorizing a competitive bidding procedure for 
durable medical equipment.
    Such a competitive bidding process would jeopardize countless small 
business jobs across the country, and limit patients' choice of 
providers as small companies producing durable medical equipment go out 
of business. Within my district, over 1,200 workers in just one local 
company, Pride Mobility Products, could lose their jobs due to a 
dramatic shift in the type and amount of products purchased by 
customers if a competitive bidding program were implemented.
    I recognize that cost-saving measures are an important aspect of 
this legislation. However, within the realm of durable medical 
equipment, I believe these cost savings could better be achieved 
through an approach utilized in the Senate version of the bill. There, 
savings on durable medical equipment are attained by imposing a seven-
year CPI-U price freeze on the fee schedules for durable medical 
equipment. According to the Congressional Budget Office, this measure 
would provide equivalent cost savings, yet would eliminate the damage 
to patients and small businesses that a competitive bidding system as 
contemplated in the House bill would create. A price freeze would 
further not require the development and administration of a new 
bureaucracy.
    In closing, I recognize that this is a highly complex issue, but 
one that is extremely important to my congressional district. Thank you 
again for giving me the opportunity to present these facts to you 
today.
                                 ______
                                 

    Prepared Statement of Hon. John F. Tierney, a Representative in 
                Congress From the State of Massachusetts

    Mr. Chairman, Mr. Chairman, I thank you and the other members of 
the Committee on Rules for giving me the opportunity to present 
testimony on an amendment I hope to offer to the Medicare Prescription 
Drug and Modernization Act which will protect the private prescription 
drug benefits for Medicare-eligible retirees.
    As many as 7 million American retirees have already fallen victim 
to post-retirement cutbacks or elimination of health care benefits--
benefits they worked their entire life to attain. Without my amendment, 
this legislation will accelerate that process.
    Under the Medicare bill, retirees who receive coverage from their 
former employer would not be able to count employer-paid costs toward 
the $3,500 out of pocket catastrophic coverage threshold. Thus, 
retirees with employer-based health care (and their former employers) 
are penalized because this employer coverage is not considered 
spending.
    The Congressional Budget Office estimates that 32 percent of 
retirees that have a drug benefit through their employers will lose 
coverage as a result of this legislation, because there will be no 
incentive for employers to provide it.
    Unfortunately, some corporations are likely to use the excuse that 
Congress provided a Medicare prescription drug benefit at all to cut 
their retirees off from this promised benefit.
    The consequences are twofold:
    First and foremost, employees will be denied a key component of the 
health care benefits that they were promised upon their retirement. 
These retirees lived up to their end of the employment bargain during 
years of hard work; they earned this benefit; now the companies that 
they faithfully served will not be held up to the same standard.
    And the impact may be dramatic--roughly 12 million Medicare 
beneficiaries (about one third of all beneficiaries) currently have 
retiree coverage through a former employer.
    Second, the cutback in private coverage will place increased 
pressure on the Medicare system when these retirees turn to the program 
for full coverage. This change will unfairly shift the cost burden for 
their prescription drugs from private companies--who took on the burden 
willingly as an explicit incentive they offered to their employees--
over to the federal government.
    My amendment would protect retirees and bring common sense and 
fairness back to retiree health. Specifically:
    My amendment will protect retirees by prohibiting employers from 
making post-retirement cancellations or reductions of prescription drug 
benefits that Medicare eligible retirees were entitled to when they 
retired;
    It will protect taxpayers by allowing retirees to retain their 
private coverage;
    And it will both protect retirees and employers by allowing 
employer-paid prescription drug expenses (and retiree cost sharing 
under the former employer's plan) to count as beneficiary ``out of 
pocket'' expenses for purposes of reaching the catastrophic coverage 
threshold.
    This amendment is strongly endorsed by the National Retiree 
Legislative Network and it's over 1.6 million members across the 
country. They have joined together to address the crisis in retiree 
health care, which--without my amendment--the Medicare Prescription 
Drug and Modernization Act threatens to make far worse.
    Again, Mr. Chairman, I thank you and the other members of the 
Committee for your consideration. I hope you will make my amendment in 
order.

    Mr. McGovern. I would also like to ask unanimous consent to 
insert in the record a letter that was addressed to John 
Dingell from Senator Kennedy of Massachusetts in opposition to 
the House bill, in which he called it ``opening the door to 
privatization of Medicare.'' I would like that to be in the 
record as well, sir.
    The Chairman. Without objection.
    [The information follows:]
    [GRAPHIC] [TIFF OMITTED] 89585A.001
    
    [GRAPHIC] [TIFF OMITTED] 89585A.002
    
    Mr. McGovern. I just have a few brief questions.
    On the issue of copays for home health care, because that 
is what I was talking about earlier, Mrs. Johnson, you say it 
is only 1.5 percent, it is not that big of a deal. But, on 
average, that could be $40 per episode or $60 per episode, in 
some cases even $100 per episode. That is a pretty big deal to 
a lot of seniors on fixed incomes.
    We can debate whether it is a good idea or not, but I guess 
my question to you is, given the fact that the Energy and 
Commerce Committee voted one way on this and the Ways and Means 
voted the other, my question to both of you is, at a minimum, 
would you be in favor of allowing us to have an amendment on 
the floor that we can debate this issue?
    I mean, everybody has their different opinions on it. We 
can argue it. But given the fact that the two committees of 
jurisdiction were split, wouldn't it be appropriate for us to 
have that amendment on the floor? That is my question.
    Mrs. Johnson. That is certainly a decision for the Rules 
Committee.
    This is kind of an age-old debate. It is an easier debate, 
I think, when we are talking about per episode than when we are 
talking about per visit. It is just a question of whether you 
think--if your copayment----
    Mr. McGovern. But $100 per episode is a lot of money.
    Mr. Walden. If I might, you are limited to $40 per episode, 
and people under 135 percent of poverty don't pay the copayment 
at all. And you get 4 visits.
    Mr. McGovern. But, you know, that is still significant--I 
guess in your committee you voted to remove this?
    Mr. Walden. I did. I also voted and the committee voted to 
increase the reimbursement rate by 5 percent the next 2 years.
    Mr. McGovern. My only question to you is, we can argue the 
merits of this and we can do it on the floor and/or here as 
well, but--would you object to an amendment that you had the 
privilege to vote on in your committee?
    Mr. Walden. Well, again, as I say, my amendment covered two 
points, one was the copay and the other was increasing, which I 
think is even more important, the 5 percent reimbursement rate 
in both of the next 2 years.
    And what I have seen in a very rural district is that home 
health is getting hit hard and going out of business. I 
represent a district that is bigger than your State.
    Mr. McGovern. Believe me, it is not just in rural areas. We 
are having a problem in urban as well.
    Mr. Walden. I understand that. But I think with the change 
in how the copay will work in home health care, I am satisfied 
with the bill the way it is.
    Mr. McGovern. I appreciate your satisfaction. I am not 
satisfied. But I guess I would like the opportunity to be able 
to have the freedom to vote on some of these things. That is 
all my point is.
    Mrs. Johnson. I should, though, clarify the fact, five or 
fewer visits are exempted. The average per episode cost is 
$3,400, so we are talking about a $40 copayment for an average 
taxpayer cost of $3,400.
    Mr. McGovern. But, again, depending on your income level.
    Let me ask you another question.
    Mrs. Johnson. Way below income.
    Mr. McGovern. The other question is, you both represent two 
different committees here. And you mentioned the drug 
importation bill as being a new provision that wasn't in either 
of the Energy and Commerce mark or the Ways and Means mark.
    Are there any other provisions that are in this bill that 
we haven't read yet, that were in neither the Energy and 
Commerce mark nor the Ways and Means mark?
    Mrs. Johnson. Yes, the Hatch-Waxman and the discount card.
    Mr. Walden. I went through some of them, and I referenced 
the others, the AWP.
    Do you want me to go through them? Would that be helpful?
    The Chairman. Whatever Mr. McGovern would like.
    Mr. McGovern. Yes.
    Mr. Walden. There are only three, so that I can get into 
detail for the sake of time.
    AWP, the final language establishing house CMS 
reimbursements for drugs administered in a physician's office 
setting is similar to policy passed by the Energy and Commerce 
Committee last week, similar to committee passed bill, H.R. 1, 
will ensure that physicians will retain the ability to obtain 
their drugs through either a contractor or through a market 
reimbursement system known as the ``average sales price 
system.''
    At the markup, the committee added an amendment that 
increased reimbursement to ASP from 100 percent to 112 percent. 
The language is largely retained in H.R. 1.
    Medicaid DSH, also H.R. 1, also contains neither the 
Medicaid disproportionate share hospitals--the legislation 
expands upon the marked-up Energy and Commerce Committee 
policies, provided all States with a one-time, 20 percent 
increase in their Medicaid DSH allotments. This policy targets 
dollars to those hospitals that need resources the most.
    And, finally, rural policies. In addition to some of the 
party rural provisions that were passed out of the Ways and 
Means Committee, the Energy and Commerce Committee contains 
specific provisions that increase payments for providers in 
rural areas.
    First, we establish a floor on the reimbursements for the 
component fee schedule. This policy will help ensure physicians 
in rural areas are reimbursed adequately for their services.
    Second, we also bump up payment levels 5 percent annually 
for 2 years to home health agencies operating in rural areas. 
This policy will ensure that those home health agencies located 
in some of our most vulnerable areas receive some added help.
    Both of those provisions are contained in H.R. 1.
    Mr. McGovern. Are there any provisions, or is there any 
language in this new bill that would apply to any single 
corporation or industry or interest group?
    And the reason why I ask that question is because I just--I 
don't want to wake up on Monday morning and read the New York 
Times and find out, like we did on the Homeland Security bill, 
that there is a deal for, you know, Eli Lilly or some company. 
I mean, I am just asking for your--I haven't gone through all 
of this.
    Mr. Walden. I am not aware of any such provision.
    Mr. McGovern. We have your assurance that there are no 
special provisions in here for any single corporation?
    Mrs. Johnson. There are no provisions for any single 
corporation, to my knowledge. But there is a change in how we 
respond to employer-provided retirement plans to try to prevent 
companies from dropping those plans. And the estimate is that 
far fewer companies will drop those plans than would have under 
any other scenario.
    One of the differences between the Democratic alternative 
and our alternative is that under the Democratic alternative, a 
great majority of the employer-provided plans will drop out 
because the plan is very good. Why should they be in it?
    Under our plan, we provide them with an incentive to stay 
in by providing them with a portion of the subsidy of the plan. 
We don't provide them with the equivalent subsidy for the whole 
plan because their people don't meet the out-of-pocket 
requirement for catastrophic coverage. But we do give them a 
capitated amount that represents the 80/20, proportionate to 
their drug spending if their drug benefit is as good as ours.
    Mr. McGovern. Finally, one last question, Mr. Walden. How 
many Medicare HMOs offer plans in your district today?
    Mr. Walden. You know, most of the Medicare+Choice plans 
have left my district, in part because Oregon has one of the 
lowest AAPCC reimbursement rates in the country, proving that 
the Federal Government believes no good deed should go 
unpunished.
    We have one of the shortest stays and least costly delivery 
systems. I would be happy to compare ours against any other 
State that has $700 per person per county, when we get $400, 
and equalize those rates. I would love to have that amendment, 
Mr. Chairman, if I could.
    Mr. McGovern. Why I raised it is, if those plans can't make 
it in your district, how can the new plans make it that are 
called for in this bill?
    Mrs. Johnson. There are two ways in which the new plans 
will reach more broadly than the old plans did.
    First of all, the Choice plans will be funded at the same 
level as Medicare. They will get 100 percent fee-for-service, 
just like we spend on ordinary fee-for-service beneficiaries.
    And then their future growth and reimbursements are tied to 
fee-for-service, so it is certain and predictable. That helps 
them stay in the market.
    And then, in 2006, they have the right to bid their own 
premiums and not be dependent on the vagaries of congressional 
action, but they have to bid around the fee-for-service costs. 
So if they bid above that, beneficiaries will have to pay more. 
If they bid below that, but they can give lots more benefits--
if they bid below that, the beneficiary can have a premium 
reduction.
    So that will give us a good understanding of whether or not 
those plans are any more efficient than Medicare. And, in 
addition, the enhanced plans will be required to be regional.
    That is the nature of them, there will be 10 regions. So 
under that scenario, Oregon would be a very good deal for an 
enhanced plan, because they are a cheap delivery area; but on 
the other hand, their AAPCC would be brought up by the regional 
average. So the likelihood that Oregon would be part of a 
regional plan and enjoy the benefits of better technology, of 
better disease management and integrated care, regionally, is 
very great.
    If you listen to Tommy Thompson, he really thinks--and, 
remember, he is an old hand at rural health from Wisconsin, and 
he really thinks that the enhanced--bucking up of the rural 
providers to the reimbursement package and the enhanced plan is 
going to improve the quality of rural health dramatically. And 
all of the actuaries say there will be a 40 percent 
penetration, or take-up rather.
    Mr. McGovern. With all due respect, I will believe it when 
I see it. But I appreciate your comments here.
    Mr. Frost. If the gentleman will yield, I wanted to be 
clear on Mr. Walden's answer because for the last 10 years, up 
until 2 years ago, I had a significant rural area in my 
district also; and all of the HMOs withdrew from my two rural 
counties. Not a single HMO serves my two rural counties.
    Are there any HMOs that currently serve your rural areas?
    Mr. Walden. For Medicare or in general?
    Mr. Frost. In Medicare.
    Mr. Walden. In terms of the Medicare+Choice plans?
    Mr. Frost. Yes.
    Mr. Walden. I do not believe there are. There is a hybrid 
of sorts that is left, I believe, in one county. But, Mr. Frost 
and Mr. McGovern, you have got to understand my district if you 
want to understand rural. I understand Texas understands rural, 
but I have got three counties with no hospitals, no doctors, 
and you drive 100 miles to find the nearest physician. And so 
we are talking frontier medicine out there.
    The few doctors that do deliver babies are going out of 
business because the malpractice rates are skyrocketing. We 
need to do something about that, too. So we are in crisis out 
there.
    Mrs. Johnson. I do want the record to show that the reason 
those plans dropped out is that they would be totally 
reimbursed at 95 percent. Gradually, their reimbursements 
shrank, and many of them were down to between 80 and 85 of AWP 
as a reimbursement subsidy. First, they shrank benefits and 
then they left the market.
    One of the reasons you have to not only bring them back in 
at a reasonable reimbursement, but the reimbursement has to be 
predictable. And so we tie it to simply growth in fee-for-
service. We will pay no more or no less than we paid for the 
average Medicare beneficiary under the plans. So we will now 
finally see whether stable plans can offer seniors more under 
integrated care.
    We also mandate, although we don't pay them any more, that 
they do disease management across the board.
    Mr. Frost. I would be happy to provide this, but I would 
point out, in addition to the fact that there were--my two 
rural counties, all of the HMOs went away; in my two urban 
counties, where there were eight HMOs under Medicare, now there 
is only one.
    Mrs. Johnson. It was all the same mechanism. It is a 
tragedy. When I lost my last HMO, the people who complained the 
most were the people who were in the cardiac disease management 
programs, and there was nothing in Medicare that they could go 
to.
    So I can't tell you what an advance this is going to be in 
health care, to not only require the plans to do this, but set 
Medicare up to do this.
    Mr. Frost. Can you understand why there is a healthy 
skepticism on the part of many of us in relying on the private 
plan that didn't work under Medicare+Choice?
    Mrs. Johnson. We think we have dealt with those problems, 
regulatory, reimbursement-wise, and there are a couple of other 
things that are there.
    The Chairman. Mr. McGovern.
    Mr. McGovern. I yield.
    The Chairman. Mr. Hastings.
    Mr. Hastings of Washington. Thank you, Mr. Chairman.
    I would like to know, if this can be confirmed, that the 
scoring on this bill is less than the $400 billion that we had 
within our budget program parameters.
    Mrs. Johnson. Yes, 393 billion.
    Mr. Hastings of Washington. I just--Mr. Chairman, I would 
like to make note, in my first term, I recall, in 1995, the 
Medicare trustees gave a report to Congress; and they said, 
unless there are structural changes made in Medicare, Medicare 
would be dead broke, if my memory serves me correctly, by the 
year 2001--if my memory serves me correctly.
    I recall that many of us, particularly on our side, were 
looking at ways to reform Medicare; and I know I can speak 
personally for myself, spent a lot of time in my district 
talking about the options of even talking about it.
    Of course, nothing, unfortunately, happened in 1995 or in 
1996. As a matter of fact, I also recall that in 1996 the issue 
of Medicare reform became a huge political football. In other 
words, our seniors were trying to help whipsaw all of this, so 
we came back in 1997. And, again if my memory serves me 
correctly, we discovered that the Medicare trustees came back 
and said we got some bad news. The 2001 date now has been 
accelerated to 2000. So we had a 3-year window to try to fix it 
before it went dead broke.
    We did make some fixes that moved that ahead. We can debate 
and nitpick on whether they were exactly the right things to 
do.
    But I want to commend Nancy. I know you have been in the 
forefront of this all of the time that I have been here--and, 
of course, Energy and Commerce also--and to recognize that 
prescription drugs have a therapeutic value that ought to be 
part of this whole thing, but it wouldn't work unless you had 
basic reforms, I think that you have, in the product that you 
are coming up with here, accomplished that.
    I think and I hope that there will be some time so that we 
can go back and review some of these things on a regular basis 
and make sure that they are working, that they are not set in 
concrete.
    I think the product that you have come up with is a product 
that is certainly worthy of support.
    Based on this, we tend to forget past history, and if we 
forget past history, we are bound to repeat it again. The 
sooner we confront this, the better off we are.
    I commend both of you and the committees for doing this 
work. It is something that needs to be done; the time is right. 
And for those that say this is being imposed upon us in a very 
short period of time, I think you have simply forgotten that we 
talked about taking this up all along. This is something we 
knew we were going to take up the first part of this year.
    So I wanted to commend you and thank you very much.
    The Chairman. Thank you very much.
    Mr. Hastings.
    Mr. Hastings of Florida. Thank you very much, Mr. Chairman.
    First, Mr. Chairman, when an errata occurs, people should 
be big enough to admit it. Let me say to Mr. Linder that he is 
absolutely correct; I made the fatal mistake of quoting 
colleagues that have made the fatal mistake of not having read 
the legislative history.
    I ask unanimous consent that the legislative history with 
reference to the origin of Medicare, dated March 23, 1965, be 
submitted into the record. And it would include, Mr. Chairman, 
that there were 237 yeas that were Democrats. And Mr. Linder is 
correct, there were 70 Republicans that voted yes; there were 
47 Democrats that voted no and 69 Republicans that voted no.
    With your permission, I think it would help a lot of 
people.
    [The information follows:]

 Legislative History: Vote Tallies for the Passage of Medicare in 1965

House and Senate Votes: D = Democrat R = Republican
            House Vote--July 27, 1965
                              yeas: (307)
    Adams-D; Addabbo-D; Albert-D; Anderson, Tenn.-D; Annunzio-D; 
Ashley-D; Ashmore-D; Aspinall-D; Ayres-R; Baldwin-R; Bandstra-D; 
Barrett-D; Bates-R; Beckworth-D; Bell-R; Bingham-D; Boggs-D; Boland-D; 
Bolling-D; Brademas-D; Brooks-D; Broomfield-R; Brown, Calif.-D; 
Broyhill, N.C.-R; Broyhill, Va.-R; Burke-D; Burton, Calif.-D; Byrne, 
Pa.-D; Byrnes, Wis.-R; Callan-D; Cameron-D; Carey-D; Carter-R; 
Cederberg-R; Celler-D; Chamberlain-R; Chelf-D; Clark-D; Cleveland-R; 
Clevenger-D; Cohelan-D; Conable-R; Conte-R; Conyers-D; Corbett-R; 
Corman-D; Craley-D; Cramer-R; Culver-D; Cunningham-R; Curtin-R; 
Daddario-D; Dague-R; Daniels-D; Dawson-D; de la Garza-D; Delaney-D; 
Dent-D; Denton-D; Diggs-D; Dingell-D; Donohue-D; Dow-D; Dulski-D; 
Duncan, Oreg.-D; Dwyer-R; Dyal-D; Edmondson-D; Edwards, Calif.-D; 
Ellsworth-R; Evans, Colo.-D; Everett-D; Evins, Tenn.-D; Fallon-D; 
Farbstein-D; Farnsley-D; Farnum-D; Fascell-D; Feighan-D; Fino-R; Flood-
D; Fogarty-D; Foley-D; Ford, William D.-D; Fraser-D; Friedel-D; Fulton, 
Pa.-R; Fulton, Tenn.-D; Gallagher-D; Garmatz-D; Gettys-D; Giaimo-D; 
Gibbons-D; Gilbert-D; Gilligan-D; Gonzalez-D; Goodell-R; Grabowski-D; 
Gray-D; Green, Oreg.-D; Green, Pa.-D; Greigg-D; Grider-D; Griffin-R; 
Griffiths-D; Grover-R; Gubser-R; Gurney-R; Hagen, Calif.-D; Halpern-R; 
Hamilton-D; Hanley-D; Hanna-D; Hansen, Iowa-D; Hansen, Wash.-D; Hardy-
D; Harris-D; Harvey, Mich.-R; Hathaway-D; Hawkins-D; Hays-D; Hechler-D; 
Helstoski-D; Henderson-D; Herlong-D; Hicks-D; Holifield-D; Holland-D; 
Horton-R; Hosmer-R; Howard-D; Hull-D; Hungate-D; Huot-D; Hutchinson-R; 
Ichord-D; Irwin-D; Jacobs-D; Jennings-D; Joelson-D; Johnson, Calif.-D; 
Johnson, Okla.-D; Johnson, Pa.-R; Jones, Ala.-D; Karsten-D; Karth-D; 
Kastenmeier-D; Kee-D; Keith-R; Kelly-D; King, Calif.-D; King, N.Y.-R; 
King, Utah-D; Kirwan-D; Kluczynski-D; Krebs-D; Kunkel-R; Landrum-D; 
Leggett-D; Lindsay-R; Long, Md.-D; Love-D; McCarthy-D; McClory-R; 
McCulloch-R; McDade-R; McDowell-D; McEwen-R; McFall-D; McGrath-D; 
Macdonald-D; Machen-D; Mackay-D; Mackie-D; Madden-D; Mailliard-R; 
Martin, Mass.-R; Mathias-R; Matsunaga-D; Matthews-D; Meeds-D; Miller-D; 
Mills-D; Minish-D; Mink-D; Minshall-R; Moeller-D; Monagan-D; Moore-R; 
Moorhead-D; Morgan-D; Morris-D; Morrison-D; Morse-R; Mosher-R; Moss-D; 
Multer-D; Murphy, Ill.-D; Murphy, N.Y.-D; Natcher-D; Nedzi-D; Nix-D; 
O'Brien-D; O'Hara, Ill.-D; O'Hara, Mich.-D; O'Konski-R; Olsen, Mont.-D; 
Olson, Minn.-D; O'Neill, Mass.-D; Ottinger-D; Patman-D; Patten-D; 
Pelly-R; Pepper-D; Perkins-D; Philbin-D; Pike-D; Pirnie-R; Powell-D; 
Price-D; Pucinski-D; Purcell-D; Race-D; Randall-D; Redlin-D; Reid, 
N.Y.-R; Reifel-R; Reinecke-R; Resnick-D; Reuss-D; Rhodes, Pa.-D; 
Rivers, Alaska-D; Roberts-D; Robison-R; Rodino-D; Rogers, Colo.-D; 
Rogers, Fla.-D; Ronan-D; Roncalio-D; Rooney, N.Y.-D; Rooney, Pa.-D; 
Roosevelt-D; Rosenthal-D; Rostenkowski-D; Roush-D; Roybal-D; Ryan-D; 
St. Germain-D; St. Onge-D; Saylor-R; Scheuer-D; Schisler-D; 
Schmidhauser-D; Schneebeli-R; Schweiker-R; Secrest-D; Senner-D; 
Shipley-D; Sickles-D; Sikes-D; Sisk-D; Slack-D; Smith, Iowa-D; Smith, 
N.Y.-R; Stafford-R; Staggers-D; Stalbaum-D; Stanton-R; Steed-D; 
Stratton-D; Stubblefield-D; Sullivan-D; Sweeney-D; Talcott-R; Taylor-D; 
Teague, Calif-R; Tenzer-D; Thomas-D; Thompson, N.J.-D; Thompson, TeX.-
D; Todd-D; Trimble-D; Tunney-D; Tupper-R; Tuten-D; Udall-D; Ullman-D; 
Van Deerlin-D; Vanik-D; Vigorito-D; Vivian-D; Walker, N. Mex.-D; 
Watkins-R; Watts-D; Weltner-D; Whalley-R; White, Idaho-D; White, Tex.-
D; Widnall-R; Wilson, Charles H.-D; Wolff-D; Wright-D; Wyatt-R; Wydler-
R; Yates-D; Young-D; Zablocki-D.
                              nays: (116)
    Abbitt-D; Abernethy-D; Adair-R; Anderson, Ill.-R; Andrews, George 
W.-D; Andrews, Glenn-R; Andrews, N. Dak.-R; Arends-R; Ashbrook-R; 
Baring-D; Battin-R; Belcher-R; Bennett-D; Berry-R; Betts-R; Bolton-R; 
Bray-R; Brock-R; Brown, Ohio-R; Buchanan-R; Burleson-R; Burton, Utah-R; 
Cabell-D; Callaway-R; Casey-D; Clancy-R; Clausen, Don H.-R; Clawson, 
Del.-R; Collier-R; Cooley-D; Curtis-R; Davis, Ga.-D; Davis, Wis.-R; 
Derwinski-R; Devine-R; Dickinson-R; Dole-R; Dorn-D; Dowdy-D; Downing-D; 
Duncan, Tenn.-R; Edwards, Ala.-R; Erlenborn-R; Findley-R; Fisher-D; 
Flynt-D; Ford, Gerald R.-R; Fountain-D; Frelinghuysen-R; Fuqua-D; 
Gathings-D; Gross-R; Hagan, Ga.-D; Haley-D; Hall-R; Halleck-R; Hansen, 
Idaho-R; Harsha-R; Harvey, Ind.-R; Hebert-D; Jarman-D; Jonas-R; Jones, 
Mo.-D; Kornegay-D; Laird-R; Langen-R; Latta-R; Lennon-D; Lipscomb-R; 
Long, La.-D; McMillan-D; MacGregor-R; Mahon-D; Marsh-D; Martin, Ala.-R; 
Martin, Nebr.-R; May-R; Michel-R; Mize-R; Morton-R; Murray-D; Nelsen-R; 
O'Neal, Ga.-D; Passman-D; Pickle-D; Poage-D; Poff-R; Pool-D; Quie-R; 
Quillen-R; Reid, Ill.-R; Rhodes, Ariz.-R; Rivers, S.C.-D; Rogers, Tex.-
D; Roudebush-R; Rumsfeld-R; Satterfield-D; Scott-D; Selden-D; Shriver-
R; Skubitz-R; Smith, Calif.-R; Smith, Va.-D; Springer-R; Stephens-D; 
Teague, Tex.-D; Thomson, Wis.-R; Tuck-D; Utt-R; Waggonner-D; Walker, 
Miss.-R; Whitener-D; Whitten-D; Williams-D; Wilson, Bob-R; Younger-R.
                            not voting: (10)
    Blatnik-D; Bonner-D; Bow-R; Cahill-R; Colmer-D; Keogh-D; Toll-D; 
McVicker-D; Watson-D; Willis-D.
                    final senate vote--july 28, 1965
                               yeas: (70)
    Aiken-R; Anderson-D; Bartlett-D; Bass-D; Bayh-D; Bible-D; Boggs-R; 
Brewster-D; Burdick-D; Byrd, W. Va.-D; Cannon-D; Carlson-R; Case-R; 
Clark-D; Cooper-R; Cotton-R; Dodd-D; Douglas-D; Fong-R; Fulbright-D; 
Gore-D; Gruening-D; Hart-D; Hartke-D; Hayden-D; Hill-D; Inouye-D; 
Jackson-D; Javits-R; Jordan, N.C.-D; Kennedy, Mass.-D; Kennedy, N.Y.-D; 
Kuchel-R; Lausche-D; Long, Mo.-D; Long, La.-D; Magnuson-D; Mansfield-D; 
McClellan-D; McGee-D; McGovern-D; McIntyre-D; McNamara-D; Metcalf-D; 
Mondale-D; Monroney-D; Montoya-D; Morse-D; Moss-D; Muskie-D; Nelson-D; 
Neuberger-D; Pastore-D; Pell-D; Prouty-R; Proxmire-D; Randolph-D; 
Ribicoff-D; Russell, S.C.-D; Russell, Ga.-D; Saltonstall-R; Scott-R; 
Smathers-D; Smith-R; Symington-D; Talmadge-D; Tydings-D; Williams, 
N.J.-D; Yarborough-D; Young, Ohio-D.
                               nays: (24)
    Allott-R; Bennett-R; Byrd, Va.-D; Dominick-R; Eastland-D; Ellender-
D; Ervin-D; Fannin-R; Hickenlooper-R; Holland-D; Hruska-R; Jordan, 
Idaho-R; Miller-R; Morton-R; Mundt-R; Murphy-R; Pearson-R; Robertson-D; 
Simpson-R; Stennis-D; Thurmond-R; Tower-R; Williams, Del.-R; Young, N. 
Dak-R.
                            not voting: (6)
    Church-D; Curtis-R; Dirksen-R; Harris-D; McCarthy-D; Sparkman-D.

              SUMMARY OF PARTY AFFILIATION ON MEDICARE VOTE
------------------------------------------------------------------------
                                                                   Not
                                                 Yea      Nay     voting
------------------------------------------------------------------------
Senate:
    Democrats................................       57        7        4
    Republicans..............................       13       17        2
House:
    Democrats................................      237       47        8
    Republicans..............................       70       69        2
------------------------------------------------------------------------


    The Chairman. Thank you.
    I frankly thought that you were talking about the 1993 tax 
bill when you were referring to the 1965 Medicare bill. You 
would have been correct.
    Mr. Hastings of Florida. I understand you very well. That 
is what kind of saved Medicare.
    But now, by 2010, it is dark and the rest of you all don't 
pay attention, it will probably be gone, out of business, by 
that time, thanks to what we have done since then in the way of 
tax cuts. It could have paid for all of this.
    But, that said, let me ask either of our witnesses who--I 
echo the thanks that have been offered to them by colleagues 
for your work--why does this bill go into effect in 2006?
    Mrs. Johnson. Our bill goes into effect in 2006, and I 
believe every other initiative does. It takes 2 years to set up 
a nationwide prescription drug plan. To compensate for that, we 
put in the immediate drug card.
    Incidentally, I appreciated your reading that e-mail from 
your constituent. Unfortunately, there are a lot of 
misunderstandings behind that, and I hope after the sort of 
political debate gets done, that we will all spend some time 
after the break and be able to give our constituents a clear 
understanding of what the real deal is and what has to be 
resolved in conference.
    Mr. Hastings of Florida. I am certain that I will do my 
best. I won't have very much choice. I don't go around very 
much trying to talk about parochial interests in places that I 
represent.
    I have the good fortune of representing urban and rural 
areas. It is challenging on every given occasion, and I doubt 
very seriously, based on the recent census statistics, if there 
is any Member of Congress--perhaps those that live in South 
Florida, Republican and Democratic, may have as many people 
that this bill will affect as do I. But I don't approach it 
from that standpoint.
    I am just as worried about what is happening in Greg's and 
your district as I am in mine, as it pertains to this matter. 
The people, for example, 12 million of them that are covered by 
employer plans, CBO estimated that 32 percent of them would 
lose their existing coverage.
    And I heard you in response to Mr. McGovern, Mrs. Johnson, 
talking about the fact that the proposed subsidy would 
encourage employers to keep people in the plan. But there is 
evidence rife throughout America that employers are already 
dropping coverage. Now, hopefully, this will be correct, but 
what in the bill, specifically--explain to us, if you will, 
what is going to really encourage these employers?
    Mrs. Johnson. Okay. In the--first of all, in our bill, it 
is predicted--I don't know how much reliability these 
predictions have, but that 32 percent will go out. Some of 
those would have gone out anyway. The Senate bill is 37 
percent, and the Democratic substitute is 100 percent. So that 
is sort of the lay of the land.
    In our bill, what we do--and the employers are very 
enthusiastic about this--we have negotiated a capitated 
payment, so they don't have to restructure their plan. The 
union plans and the business plans don't have to be 
restructured, but as they spend--remember, they don't get any 
benefit unless they spend. As they spend, then we give them 28 
percent of their drug costs up to $5,000.
    That was the way that was worked out, that they preferred, 
and that we felt was a fair estimate of the benefit they would 
get from the 80/20 if we went person by person.
    They don't get any benefit from the catastrophic provision.
    Mr. Hastings of Florida. I have just one other question of 
either of you, and that is in the area of low-income 
protection, because that is where a lot of us are impacted. The 
restrictive asset provisions that I looked at just a minute ago 
don't give me any great comfort, and I would wonder how we are 
improving the protection for low-income beneficiaries?
    Mrs. Johnson. Well, we are improving the protections, and I 
will let Greg speak to this, too.
    Mr. Walden. Yes. In fact, in this bill, it becomes three 
times the SSI.
    Mrs. Johnson. The asset test.
    Mr. Walden. So it is triple that.
    So we have tried to open it up to care for as many low-
income as possible. Plus, by having the phase-out at the top 
end--a cap, if you will, on the richest of the rich in American 
seniors--starting at 60,000 and then phasing out at a higher 
level than that, we are able to take the dollars available to 
us under the budget resolution, target more of them to the 
lower-income folks who need it most, people in your district, 
people in my rural district.
    It doesn't matter, if you are low income, where you live; 
the drugs are expensive and the need is great. So we felt that 
was the most appropriate use of the expenditure that we had 
available to us, to target the most possible to the lower-
income level.
    That is why on the home health copay, 135 percent of 
poverty, you don't pay it. On the premiums for this program, I 
believe 135 percent, we pick up the premium, the deductible.
    And so it really is targeted to help those most in need, 
sir.
    Mrs. Johnson. And then excluded from the asset test is the 
value of your home, without limit; a car used for necessary 
transportation, regardless of value, or a car not used for 
transportation $4,500 value.
    There are some other exclusions.
    Mr. Hastings of Florida. When all of this is finished, I 
didn't care too much for HCFA before, but I am not going to 
like the administrator that has to try to implement all of this 
stuff.
    But I appreciate you all, Ways and Means and Energy and 
Commerce. I am with my colleague, Mr. McGovern; I just have to 
wait and see. And, hopefully, hopefully, as you all suggested, 
it will work out that way.
    The Chairman. Thank you very much, Mr. Hastings.
    Mr. Sessions.
    Mr. Sessions. Thank you, Mr. Chairman. I would like to join 
Mr. Hastings and thank the Commerce Committee and Ways and 
Means for not only their attention to this very important 
issue, but for the long deliberation and, I think, improving 
upon the product, in the delivery over those last few years, 
that I have seen.
    My observations are not unlike many of my colleagues that 
believe that a modern day program would have to include 
prescription drug coverage, prescription drug coverage for 
those people who cannot afford it. I think that prescription 
drugs nowadays, as the result of a very robust and dynamic 
industry, provide help not just with symptoms but with actual 
cures of many things. That is why I am glad that we have taken 
the perspective that we have to ensure that drug companies will 
be incented to go and produce the next leading-edge drug that 
will take care of the world's needs, whether it be AIDS or 
whether it be something else that would happen across this 
world.
    America, I believe, does have a demand put on it to produce 
answers to problems wherever they exist. So I am very, very 
proud of what you have done. I am, in particular, pleased that 
so many people have shown up here this evening; and would like 
to impress upon you and let you know that I believe this 
committee, hopefully, will be looking at some perfecting 
amendments to take the hard work that you have done, but would 
allow us the opportunity to perhaps enrich this product that 
you have done and take as much time with it.
    And I want to thank both of you for your time and effort. I 
think it was a job well done, and thank you very much.
    The Chairman. Thank you very much, Mr. Sessions.
    Let me just say that we do know, as we heard from our 
opening statements, that we began this meeting at 12:50, and we 
have spent nearly 90 minutes. And I would just like to say that 
this is my fifth year as chairman of the Rules Committee, and I 
don't recall when we have had any more thoughtful exchange 
between both Democrats and Republicans and the witnesses 
representing the respective committees.
    We all know that this is designed to address a very 
important and pressing need out there. Democrats and 
Republicans alike very much want us to provide for the American 
people a package which will ensure that they have access to 
affordable prescription drugs, and at the same time, as I said 
at the outset, improve, strengthen, protect the Medicare 
system.
    Both of you should be very proud. I know I speak for every 
member of this committee when we express our appreciation for 
your very thoughtful presentations. Thank you very much.
    Mrs. Johnson. Thank you.
    Mr. Walden. Thank you.
    The Chairman. Our next witnesses, representing the minority 
from both the Ways and Means and the Energy and Commerce 
Committees, are Mr. Sandlin and Mr. Brown.
    Gentlemen, please come forward. And let me say, as I did 
with the other witnesses, that, without objection, any prepared 
remarks that you have will appear in the record in their 
entirety, and we welcome a summary.
    Mr. Brown, if you would like to proceed.

 STATEMENT OF HON. SHERROD BROWN, A REPRESENTATIVE IN CONGRESS 
                     FROM THE STATE OF OHIO

    Mr. Brown. Mr. Chairman and members of the Committee, The 
Minority on the Energy and Commerce Committee would ask for an 
open rule. If that request is not honored, the minority would 
ask that an array of substitutes and amendments be allowed on 
the floor, so that divergent views can be represented when the 
House debates this issue.
    To produce a fair debate, it is important that members have 
the opportunity to consider substitutes such as those offered 
by Mr. Rangel and Mr. Dingell, the Democratic Blue Dogs, Mr. 
Dooley, and the Republican ``Rump Group,'' as well as 
individual amendments addressing specific provisions of H.R. 1.
    The Committee on Energy and Commerce met in markup for 
three days. During that markup, my Democratic colleagues 
offered many worthy amendments, and I would certainly suggest 
that all of them be made in order under the rule.
    Without amendment, H.R. 1 dismantles Medicare, replacing 
the program's defined benefits, it's guaranteed coverage, with 
a defined contribution premium voucher.
    Medicare not only secures this nation's retirement system 
and sustains this nation's health system, it is enduringly 
popular with the American public. It is fundamentally wrong for 
Congress to strip Medicare beneficiaries of guaranteed, 
reliable health insurance under the guise of adding a drug 
benefit to the program.
    Amendments are also called for to address serious flaws in 
H.R. 1's drug coverage.
    Rather than simply adding a drug benefit to Medicare, this 
bill forces seniors to either join an HMO or purchase stand-
alone drug coverage. There is no commercial market for stand-
alone plans today. Insurers are balking at the prospect of 
offering stand-alone plans. This bill would subject millions of 
seniors to a private insurance experiment that is already on 
shaky ground.
    And the drug coverage itself is woefully inadequate. 
Seniors with $5,000 in drug expenses would still pay nearly 
$4,000 out of pocket. The bill's coverage gap forces 
beneficiaries to pay 100 percent of their drug costs after the 
first $2,000 of drugs have been purchased until the beneficiary 
has spent another $2,900 out of pocket.
    And for the first time, benefits would be means-tested, 
transforming Medicare from a retirement savings program into a 
federal welfare program.
    The substitute which Mr. Rangel and Mr. Dingell offered in 
their respective committees is different from H.R. 1 in several 
key ways. The substitute strengthens Medicare rather than 
privatizing it. The substitute does not erect a new private 
insurance system and force seniors into it; reliable, 
guaranteed drug benefits are added to the core Medicare 
program.
    These benefits represent true insurance. They are 
comparable to those available to members of Congress. All 
seniors who contribute into Medicare would receive the same 
benefits out of Medicare. There is no means testing.
    And there are several potent cost control mechanisms in the 
substitute, because it would be irresponsible to pass drug 
coverage legislation without them.
    The substitute enables the federal government to harness 
the collective purchasing power of 40 million Medicare 
enrollees and secure discounted drug prices.
    When you think about the sales volume 40 million 
beneficiaries represents, deep discounts are fully appropriate. 
Yet, H.R. 1 prohibits the federal government from securing 
those discounts. The substitute also includes measures to 
increase access to lower cost generic drugs and provide for the 
reimportation of drugs that are deemed safe by the Secretary of 
Health and Human Services. These amendments are identical to 
those recently adopted by the Senate.
    H.R. 1 does not address the prescription drug coverage gap 
in Medicare; it perpetuates that gap with grossly inadequate 
drug benefits. H.R. 1 does not strengthen Medicare; it abandons 
it to the private insurance industry.
    I urge my colleagues to seriously consider whether it is in 
the best interests of this nation to take Medicare down such a 
reckless path, and I urge my colleagues on the Rules Committee 
to allow Members the opportunity to consider a range of 
substitutes and amendments.
    The Chairman. Thank you very much, Mr. Brown. We appreciate 
you being here. Thank you for your remarks.
    Mr. Sandlin.

  STATEMENT OF HON. MAX SANDLIN, A REPRESENTATIVE IN CONGRESS 
                    FROM THE STATE OF TEXAS

    Mr. Sandlin. Due to the time, I would just like to 
associate myself with what my good friend, Mr. Brown, has 
enumerated about the bill as a whole.
    I would like to say, I too join in hoping that the 
committee would allow an open rule and allow the substitutes, 
such as Mr. Dingell, Mr. Dooley, the Blue Dogs and all of the 
other individual amendments in an attempt to make the bill 
better.
    Let me make one specific point on an amendment that I have 
offered specifically, along with Representative Green from 
Texas, Gene Green, who is on the Commerce Committee.
    As you know, the original bill, H.R. 1, has what is 
commonly referred to--we refer to as ``the doughnut.'' It makes 
beneficiaries 100 percent financially liable for all 
prescription drug costs between $2,000 and $4,900. That leaves 
beneficiaries with a gap of $2,900 where they still are paying 
the premiums each month, but they are getting no coverage from 
their plan.
    And really the only way that they are going to know that, 
they are going to remember that they have coverage is when they 
send that check in every month. So all of that has to be paid 
for by the beneficiary in that range.
    This amendment offered by me and by Gene Green from Houston 
simply extends the 20 percent beneficiary cost-sharing up to 
the $4,900 after the $250 deductible, closes the doughnut hole. 
Thank you.
[GRAPHIC] [TIFF OMITTED] 89585A.003

    The Chairman. Thank you very much, Mr. Sandlin. Appreciate 
that.
    Mr. Linder.
    Mr. Linder. No.
    Mr. Frost. Mr. Chairman, at this point I would like to 
submit for the record a letter from the AARP on the subject of 
this legislation.
    The Chairman. Without objection, the letter will be 
entered.
    Mr. Frost. This is to the Honorable Bill Thomas.
    [The information follows:]
    [GRAPHIC] [TIFF OMITTED] 89585A.004
    
    [GRAPHIC] [TIFF OMITTED] 89585A.005
    
    [GRAPHIC] [TIFF OMITTED] 89585A.006
    
    [GRAPHIC] [TIFF OMITTED] 89585A.007
    
    Ms. Pryce. No questions.
    Mr. McGovern. I wanted to thank you both for being here at 
almost 2:30 in the morning. And I hope, and those of us on this 
side of the aisle on the committee are going to fight for an 
open rule, because I believe this is a big enough deal, where 
all members should have an opportunity to participate in 
shaping what this legislation should look like.
    And by restricting the rule, quite frankly, and restricting 
the substitutes that may be offered and restricting the 
amendments, you are not only locking out Democrats, you are 
locking out Republicans, but you are locking out the voices of 
the American people who have very significant concerns about 
this.
    And I just would say, as I said in the beginning--I mean, 
for the life of me, I can't quite understand what the emergency 
is, why this has to be rushed right now, why we can't take this 
product, whatever it is, because no one has read it yet and 
actually go through it and be able to go back to our districts, 
whether we are Republicans or Democrats, talk to our senior 
citizens, lay out the plan. Does this make sense? Doesn't it 
make sense? What are the concerns?
    Everyone talks about copays like they are no big deal. 
Well, for a lot of seniors on fixed incomes, $40 is a big deal, 
or any kind of copay is a big deal depending on their economic 
situation.
    And I worry too about the fact that we are opening the door 
to privatizing Medicare. You know, people--I am reading this 
article that just came over the Web from, I guess MSNBC.com. 
There is a quote from Chairman Bill Thomas: ``To those who say 
that the bill would end Medicare as we know it, our answer is, 
`We certainly hope so.' ''
    Well, I like Medicare, and most of my constituents think it 
is a pretty good program. They want to see Medicare expanded to 
provide a prescription drug benefit; they don't want to see it 
weakened or privatized. And so I am concerned that we are not 
going to get the kinds of debate and the kinds of openness that 
this deserves.
    Mr. Linder. Would you be so generous as to consider that 
Mr. Thomas might have said it should be the end of Medicare 
without prescription drugs, as he knows it?
    Mr. McGovern. I am reading the quote. And to be honest with 
you, listening to some of Mr. Thomas' previous statements on 
Medicare, I assume the worst intentions with regard to 
protecting and preserving the program.
    Mr. Linder. This is the end of Medicare as he knows it 
because Medicare, as we have known it, had no prescription 
drug.
    Mr. McGovern. I would like to see Medicare have a 
prescription drug benefit that is real, that remains real, that 
doesn't get undercut, as your bill goes into effect.
    I yield.
    Mr. Brown. I find Mr. Thomas' comments and the resultant 
spin from his ideological soul mates, sort of metaphorically 
similar to Newt Gingrich's ``wither on the vine.'' As soon as 
he said it, he knew that he shouldn't. Republicans responded in 
ways that it had something to do with HCFA and all of that.
    Mr. Linder. Would the gentleman yield?
    Mr. Brown. It is his time. Sure.
    Mr. McGovern. Let me answer his question. I didn't yield.
    Mr. Brown. I am certainly willing to enter into a dialogue 
with Mr. Linder about it. I just found that it is--I will 
answer it this way.
    I heard Mr. Hastings' comments about Medicare, saying this 
and then correcting himself. Well, the real answer there is not 
that it passed, not that 74 Republicans voted for final passage 
and 73 voted against, with two abstentions--which is what 
happened. The real history and the real vote, as we know on 
motions to recommit, is that only 11 Republicans in the House 
voted for the creation of Medicare during the motion to 
recommit, the important vote. The other 60-some were doing what 
people always do here in final passage when they get 
politically jittery.
    What actually always happened was, all mainstream 
Republican leaders opposed the creation of Medicare. Gerald 
Ford, later to be minority leader, John Rhodes, Bob Dole, Strom 
Thurmond, and my favorite, Donald Rumsfeld, all opposed the 
creation of Medicare in 1965.
    So your party has a history of opposition to this program, 
and not just the far right of your party, but the mainstream of 
your party, from what happened in 1965 to Speaker Gingrich's 
tax cuts and Medicare cuts, the crown jewel of the Contract 
with America, to Bill Thomas, to Bob Dole saying--bragging to a 
conservative lobbyist in 1995 that he was there fighting the 
fight against Medicare, proudly doing it, to Newt Gingrich's 
``wither on the vine,'' to Dick Armey saying something along 
the lines of ``a civilized society wouldn't have a program like 
Medicare,'' to all of Bill Thomas' line.
    This is a family tree of opposition to and hostility to 
this program that has served the great majority of Americas 
seniors very well.
    Mr. Linder. Well, the comment would be interesting if it 
were true.
    Mr. Chris Jackson did a special on CNN that played the 
entire Newt Gingrich line. It wasn't what the unions put on TV. 
He said giving seniors choices, giving them the opportunities 
to choose in a system, the Health Care Financing Administration 
``would wither on the vine.'' He didn't say the Soviet-style 
system we now have would go away; as soon as we choose, 
consumers would come back.
    Mr. Brown. Did he say ``Soviet-style system'' in that 
statement? So you saw the whole program, but he didn't say 
``Soviet-style,'' but meant Soviet style?
    What Mr. McGovern--what he said was, HCFA would wither on 
the wine, not Medicare. And CNN exposed that lie in prime time.
    Mr. McGovern. I yield.
    Mr. Frost. Just to set the record straight, I believe it 
was Mr. Linder who called it a Soviet-type system.
    Mr. Linder. I did.
    Mr. Sandlin. Well, certainly the quote did say, Social 
Security would wither on the vine. I have read that quote 
specifically. I know exactly what it said.
    But I think that is exactly right. It will wither because 
with legislation such as this, you are making HMOs on parity 
with Medicare. And if the funding goes down, we will begin to 
say that the government can't afford Medicare, and all of the 
people will be pushed into HMOs.
    And this is particularly important in rural America, where 
I live and as--Mr. Frost referred to this a moment ago. In 
Texas alone, from 1999 to 2001, 330,000 people were dropped by 
HMOs, and 80 percent of the people in rural areas that are 
Medicare-eligible live in areas that are not served by HMOs. 
And you can just bet your boots that when this goes into effect 
and moves forward, soon there will be no Medicare, it will 
wither on the vine, as Mr. Gingrich predicted.
    And recently--the one that you left out, Senator Santorum 
said something that can't be interpreted in any way. He said, 
``We should phase out traditional Medicare.''
    That is the goal of this legislation, and if that is what 
you want to do, that is what this does.
    Mr. McGovern. I take it the answer to--Mr. Linder and 
others in the Republican Party have said enough to cause us 
heartburn, those of us who think that Medicare is an important 
program. I think it makes the case why we should do this 
thoughtfully and not rush through this. But at a minimum--since 
we are not going to do this in anything short of rushing it to 
the floor, at a minimum, we should have everybody's amendments 
and everybody's substitutes be made in order. So I support you 
in that regard.
    Thank you Mr. Chairman.
    The Chairman. Thank you.
    Let me just say that when Mr. Frost submitted the statement 
into the record, he wanted to ask some questions. So please 
proceed.
    Mr. Frost. I just have a question, if either one of you can 
answer this.
    The bill, the majority's bill, contains a means-testing 
provision where seniors with annual income higher than $60,000 
have to pay more money out of pocket before they qualify for 
catastrophic drug coverage.
    Now, there are some basic privacy issues related here. How 
are they going to get that information? What isgoing to happen? 
Is there going to be contact between the IRS and Health and Human 
Services? What happens to seniors?
    Mr. Sandlin. That is my understanding, that information 
will be transferred and shared between the IRS and the provider 
and the insurance companies, and certainly will have serious 
constitutional issues and privacy issues as this information is 
disseminated across America by the seniors.
    If you are making $60,000 a year, you would have a coverage 
gap rising up to about $11,200. You are paying for a premium 
and not really getting any benefit.
    Mr. Brown. I would add that--I mean, this sounds eerily 
like some kind of class warfare waged by the Republicans. But I 
would--I am concerned about that kind of proposal, because it 
really does undercut and actually fracture the universal 
coverage system that we know as Medicare. And if it is 60,000 
today, then as the Republicans continue their assault on 
Medicare, to privatize it, it becomes 50, 40, to the point that 
Medicare, public Medicare, public fee-for-service Medicare, 
becomes a welfare program, and where the sickest and the oldest 
and the poorest find themselves; and for more affluent--Members 
of Congress and others--we end up in private plans. And that 
should concern all of us of any income level.
    Mr. Frost. That is my only question.
    The Chairman. Thank you, Mr. Frost.
    Ms. Pryce.
    Ms. Pryce. No.
    Mr. Diaz-Balart. No questions. Thank you.
    Mr. Hastings of Florida. Mr. Chairman, I thank both of the 
witnesses. In the interest of time, I will reserve my comments.
    Mr. Hastings of Washington. No questions.
    Mr. Sessions. Thank you.
    Mr. Brown. Mr. Chairman, if I could, I won't keep the 
committee long. I have four other amendments that I will just 
submit and ask for support.
    The Chairman. Thank you very much. We appreciate that. They 
will appear in the record.
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    The Chairman. Our next witness is the gentleman from 
Indiana, Mr. Buyer. Please come forward. And without objection, 
your prepared statement will appear in the record and we 
welcome a summary. Thank you very much for your forbearance.

  STATEMENT OF HON. STEVE BUYER, A REPRESENTATIVE IN CONGRESS 
                   FROM THE STATE OF INDIANA

    Mr. Buyer. Thank you, Mr. Chairman, Mr. Frost, members of 
the committee.
    About 5 months ago there were five senior members of the 
House Energy and Commerce Committee that came together because 
we had very strong policy concerns; and it was really led by 
Richard Burr, John Shadegg, Charlie Norwood, Joe Barton and 
myself. We tried to think outside of the box.
    We are here representing just the four of us, excepting out 
Joe Barton, so I am representing Richard Burr, John Shadegg, 
Charlie Norwood and myself--are asking that our drug value card 
be a substitute to Title I along with the catastrophic 
coverage.
    And if I could ask the Rules Committee to indulge me for 
just a second--because this was a 5-month product outside of 
the committee, the work product, and it was a very serious 
level of effort--what we had hoped to do here was, how do we 
extend the drug benefit to the traditional fee-for-service 
Medicare and, at the same time, keep employers in the game? How 
do we make sure that they hold the fidelity of the commitments 
to their employees and retirees and, at the same time, keep the 
best minds in America continuing to press the bounds of science 
for the benefit of America?
    We came up with a value drug card. We permit any 
organization that is eligible to offer a CMS-approved drug 
card--it can be AARP or employers or pharmacists organizations, 
pharmacy benefit managers, drug wholesalers--you name it. If it 
is approved by CMS, they can come up with their formularies and 
offer a drug card, and have the purchasing power and have those 
drug savings; a senior can expect 15 to 35 percent savings on 
their drug value cards.
    A senior could only select one value card. Seniors would 
pay an annual $30 dollar enrollment fee. Everyone is in, and 
you have to opt out.
    We also, though--when you have this drug account, you have 
this value card that comes with a drug account; and what we do 
is, we say this is a defined contribution so the government 
knows exactly what is going to go on that account.
    So from zero to 100 percent of poverty, the government 
would put down $2,500; from 100 to 125, they put in $1,500; 
from 126 to 175, they put down $1,100; From 176 to 250 percent 
poverty, you put $600; from 251 to 350, you put $300; anyone 
above 351 percent, it is $100. So there is a defined 
contribution, so we know, as a government, exactly what we are 
putting into the program.
    At the same time, we create a tax deductible opportunity 
that individuals can put up to $5,000 into that drug account. 
And very often, we like to say, parents take an active role in 
the lives of your children. Now, what we should also be saying 
is, children take an active role in the lives of your parents.
    What is happening in society, I think is shameful. Children 
are so anxious to get hold of an inheritance that they spend 
down the assets to get mom and dad Medicaid-eligible and throw 
them in a nursing home. That is not right.
    We have become family friendly here, and we want the 
children to be able to get a tax deduction to put money on the 
value drug card. We also then say to employers, you can make a 
contribution into that card.
    And then with regard to the catastrophic benefit, all 
beneficiaries that select a drug value card are required to 
purchase a $10,000 private catastrophic coverage to avoid risk 
selection. And to encourage participation, the Federal 
Government will pay 100 percent of the premiums for those up to 
175 percent of the Federal poverty level, and then there is a 
sliding scale percentage of the premium from 176 to 250.
    And I won't go into it further, but what I want you to 
know, Mr. Chairman and the committee, this was a very serious 
level of effort. What happened in the Commerce Committee was, 
we negotiated with the chairman, and it ended up being a 
transition, and then a fall-back piece; then it got scored 
pretty high. And so it has really been scaled down 
tremendously.
    I wish this could have been a base bill. I would have loved 
the opportunity to take this to the floor. We had introduced 
it. It is one of those tough times.
    The Chairman. Well, thank you very much. We appreciate your 
very hard work on this, and thanks for the presentation.
    Mr. Linder. What was it scored at?
    Mr. Buyer. This was scored at 385 billion.
    Mr. Linder. Over 10?
    Mr. Buyer. Over 10.
    Mr. Frost. Interesting.
    I am not sure that I would support it on the floor, but I 
think that you should have the right to offer it. And if no one 
on your side will offer it when we vote on the rule, I will 
offer your amendment. I doubt that it will be accepted on your 
side, but you should have the opportunity to have a vote.
    Mr. Buyer. Thank you.
    Ms. Pryce. Thank you. I admire the work that this group 
did. They worked very hard. They have a product that I believe, 
with a little more time and a little bit more vetting, may have 
made its way to the base bill. There was just not enough time 
to see where it would go.
    I just want to say that I don't think that you should give 
up on it, because I really thought it was very innovative and 
tremendously ``out of the box'' in ways of thinking that we 
have never gotten to.
    So I would just encourage the gentleman not to give up on 
this.
    Mr. Buyer. Thank you.
    The Chairman. Mr. McGovern.
    Mr. McGovern. I think that is a polite way of telling you 
that you are not going to have the opportunity to offer your 
proposal on the floor. But I will associate myself with the 
remarks of my ranking member, Mr. Frost, and say that I 
probably wouldn't vote for your proposal on the House floor.
    But when he offers your amendment here, I will certainly 
vote for it, to make it in order, because I do think that this 
issue is important enough where everybody should be able to 
bring their proposals to the floor and debate these proposals 
up or down and let the entire House work its will.
    So I thank the gentleman for being here. I will support his 
right to offer the amendment in this committee.
    The Chairman. Thank you.
    Mr. Diaz-Balart.
    Mr. Diaz-Balart. I thank Mr. Buyer for his hard work.
    Mr. Hastings of Florida. Mr. Chairman, I just say to Mr. 
Buyer, 2 years ago I would have voted for it on the floor. But 
a $1.3 trillion tax cut later, I don't think that I would, for 
the reasons that I don't think that the 1.3 trillion was family 
friendly. And this is a measure, I agree with you, that may 
very well be family friendly.
    I do agree with my colleagues that you should have a right 
to present it. But if we could repeal some of those taxes, we 
could pay for that and a whole bunch of other things; and pay 
for what Americans want, and that is affordable drug prices. 
But we can't do it, unfortunately.
    Thank you.
    The Chairman. Thank you.
    Mr. Hastings.
    Mr. Hastings of Washington. Thank you, Mr. Chairman.
    You said that the bill we are considering there is a 
transition period. As I understand it here, what your concept 
is doing, the transition is in here?
    Mr. Buyer. There is a very small, minuscule piece of this.
    Mr. Hastings of Washington. I recognize that point.
    But I think that that may be a very, very important part of 
this, because my view is that we have had a Medicare system 
that has been in place with very few innovations over the last 
generation and a half, and I think that we ought to be thinking 
outside of the box; and this body sometimes doesn't want to 
accept that change until we have had a pilot program.
    If I might say, this may be one of those pilot programs 
that hopefully it will surprise us in a positive way. I 
congratulate you.
    Mr. Buyer. Mr. Hastings, I will embrace that, along with 
Mrs. Pryce's recommendations. We have a great staff that also 
can help put this together. That is exactly what we wanted to 
do, not think along the lines of traditional Medicare and say, 
we will just let the government do the program. Or if you have 
concerns in the private sector, will it happen; will there be 
two competitive plans in a region? What is another way of doing 
this?
    That is what 5 months of effort brought us.
    Mr. Hastings of Washington. Even though this may be 
miniscule--and I recognize the hard work that you have put in 
on this, but this could be very, very important as we look at 
this 2 years hence.
    Mr. Buyer. What it does do, Mr. Hastings and Mr. Chairman, 
is, if this bill passes and is signed into law, you have that 
3-year void. Even though I say it is minuscule, you do have an 
opportunity to cover those individuals who are at that 175 
percent below poverty, so you are extending to people who 
really need it, who are making the tough choices out there.
    So, for that, I compliment you for your compassion.
    Mr. Hastings of Washington. Thank you.
    The Chairman. Thank you.
    Mr. Sessions.
    Mr. Sessions. Thank you, Mr. Chairman. I also want to heap 
praise on you, Steve and your colleagues, for the great work 
that you have done. I think I might have started from about the 
same perspective that you did, that is, to see what impediments 
are in the way for people to be able to fully participate and 
to help themselves, whether it be tax components or other 
things, rather than just taking the whole thing on by the 
government.
    I think solving the problem through simpler ways can be 
done, and I think that is what you started to do. I think it is 
a great opportunity, and perhaps can be a model for us to look 
at. So thank you.
    I yield back.
    The Chairman. Steve, thank you for your hard work. Thank 
you very much for being here.
    Next, from the Energy and Commerce Committee, I would like 
to ask Mr. Pallone, Mr. Strickland and Ms. Capps to come 
forward.
    Please proceed as you see fit. Thanks to all three of you 
for your patience, and we appreciate your being here. Without 
objection, your prepared remarks will appear in the record. And 
Mr. Pallone, please begin.

 STATEMENT OF HON. FRANK PALLONE, A REPRESENTATIVE IN CONGRESS 
                  FROM THE STATE OF NEW JERSEY

    Mr. Pallone. Thank you, Mr. Chairman and members of the 
committee. I have two amendments, and I will try to summarize 
them together.
    And I guess I would start out by saying that, as my 
colleague, Mr. Brown, from the committee mentioned earlier, 
what we really would like to see is an open rule, and to allow 
all of these amendments. And certainly the substitute, the 
substitute that was put forward by the leadership of the Ways 
and Means and the Commerce Committee, that is the most 
important amendment that we would like to see put in order. And 
my two amendments actually are included in that substitute. So 
if you didn't allow the substitute, it would not be necessary 
to include these two amendments. But they go to the heart of 
the issue in the substitute, and I would put it this way. I 
think--I believe and I think most of my Democratic colleagues 
on the committee believe that Medicare is essentially a good 
program. It is a program that works. It is not broken. I know I 
have heard many, not necessarily you, but other people in 
Republican leadership and others on the floor say that Medicare 
is broken. Medicare needs to be fixed and doesn't work. When I 
talk to seniors in my district, they all say they like 
Medicare, and they like the program, but the one thing they 
don't like is it doesn't include a prescription drug benefit, 
and they would like it to be added.
    So essentially the Democratic substitute does just that. It 
keeps traditional Medicare--keeps Medicare the way it is, the 
way it has been, but it adds a prescription drug benefit in the 
same way that Part B was added for your doctor bills. In other 
words, you just add the benefit, you have a low premium, and 
for $25 you have a low deductible, $100, and you have 80 
percent of the costs paid for by the Federal Government. And it 
is all exactly that. In other words, it doesn't change. Those 
figures are exactly what they are, and they don't vary. So one 
of my amendments does that.
    Mr. Frost mentioned it before, which is to say that under 
the plan, even the Republican plan, those things must be fixed. 
There must be a set deductible, either 250 or 275; there must 
be a set catastrophic; and also there should be a set premium. 
And I think if you vary from that, you make it very difficult 
for the seniors to make real choices. I think many of you have 
talked about choice, but, I mean, the bottom line is there can 
be choice in terms of services and competition between 
services, but I think if you don't set a standard benefit and 
say this is what the premium is going to be, this is what the 
catastrophic is going to be, this is what the deductible is 
going to be, it just makes it that much more difficult for 
seniors to make choices and understand what they are getting.
    So that is one amendment. One amendment would simply define 
the benefit and say that those figures have to be what the 
Republicans have been advertising. You have been saying $35; 
you have been saying 250, 275. You have been saying a specific 
amount for catastrophic. It shouldn't vary. That is one 
amendment.
    The other amendment deals with the issue of negotiated 
price. And I maintain that if you don't put some language in 
the bill, regardless of the Republican or Democratic bill, that 
allows the Secretary or the Administrator of the Medicare 
programs to negotiate price and bring prices down, we will 
never be able to afford a prescription drug benefit that you 
are now applauding and advocating. The reason why the 
Republican bill has a huge doughnut hole and the reason it has 
so many problems is because you are trying to fit it within a 
certain budget amount, which is the $400 billion, and you are 
not using the price or negotiating the price as a way of 
bringing the cost down. And I think what you will find over the 
next few years if you don't allow the Secretary or the 
Administrator to negotiate the price, you will simply not be 
able to afford the program. It will go way beyond the $400 
billion that you are proposing.
    And so my second amendment would simply say that the 
Secretary or the Administrator has the authority to negotiate 
price to reduce the costs, and it makes sense. You have the 
same thing in the veterans program. You have the same thing in 
the military. And we are saying now the Secretary is going to 
have 400--40 million seniors in the country, and he has real 
opportunity to negotiate price and bring prices down and save 
for the program. Instead you go to the exact opposite. In the 
House Republican bill, you actually have a noninterference 
clause that says the Secretary or the Administrator cannot 
negotiate price and cannot actually interfere in the process in 
that way. I think that is a huge mistake. I don't know if you 
have it there for ideological reasons or you have it there 
because that is what the drug companies want, but I think in 
the long run it is going to be impossible for you to deliver on 
the very benefit that you are promising.
    So I ask that you adopt those two amendments, but, more 
important, I ask that you allow the full House to consider the 
substitute, the Democratic substitute, because that would 
include my two amendments and would allow for a real debate on 
the issue of what kind of benefit we would be providing.
    Mr. Linder [presiding]. Mr. Strickland.

STATEMENT OF HON. TED STRICKLAND, A REPRESENTATIVE IN CONGRESS 
                     FROM THE STATE OF OHIO

    Mr. Strickland. Mr. Chairman, I am offering a common-sense 
amendment. My amendment is based on the idea that all seniors, 
regardless of where they live, should pay the same premium to 
participate in Medicare prescription drug benefit; and 
moreover, that all seniors should have a reasonably good idea 
every year of what they are going to owe each month for their 
prescription drug plan.
    Now, I know that some of my colleagues claim that seniors 
under the Republican bill will pay about $35 monthly premium 
for a prescription drug benefit created by this bill, but there 
is nothing in the text, as Ms. Slaughter was able to elicit 
from our colleagues from the Ways and Means and Commerce 
earlier, there is nothing in the text of the bill that 
indicates what the premium will be. It does not require a $35 
premium. In fact, the bill does not even contain a range of 
premiums that would be acceptable under this bill. Therefore, 
my amendment would just simply ensure that all seniors are 
charged a $35-a-month premium for their Medicare drug benefit 
regardless of where they live. The $35-a-month premium would 
then be indexed each year, just like the rest of Medicare is 
indexed.
    This amendment, I believe, is essential to the constituents 
who live in a district like mine. My district stretches for 330 
miles along the Ohio River. If the plan before us today were to 
be passed into law, it is likely that the seniors living in the 
more densely populated northern part of my district would have 
access to a drug benefit that could vary widely in terms of the 
premium from the seniors who live in my more rural southern 
counties. Since plans will have to be paid more to induce their 
participation in rural areas, premiums in these rural areas 
will likely be higher.
    And then the Commerce Committee, I asked the counsel what 
guarantee there would be that a plan would even be there, a 
drug-only plan or an HMO plan would be there for seniors in 
rural areas. There is no guarantee that such a plan will be 
there. My district borders Pennsylvania, West Virginia, 
Kentucky. It is likely that seniors in those States will have 
access to prescription drugs at very different monthly rates. 
These disparities in costs will create disparities in access to 
prescription drugs, which is exactly the problem that this bill 
purports to solve. And since Medicare+Choice plans, as has been 
noted many times here this evening, move in and out, that they 
moved out of my area, 6 of my 12 counties have no access to 
Medicare+Choice now. They were there, and they left, and 
seniors were left in the lurch. So seniors know all too well 
what happens when a plan decides to pull out.
    If it is true, as many of you say, that the average monthly 
premium under this bill will be $35, then it only seems 
reasonable that we would put it in the bill so that seniors can 
have predictability, they can know how much this is going to 
cost them from year to year, and it will be indexed, and that 
is a reasonable thing to do.
    So I just urge you to accept this amendment. I think it is 
the only way that we can give seniors any kind of competence 
that their premium will be $35 rather than $85, as it was in 
Nevada, or even higher. So I ask you to consider the amendment 
and to rule on it in a positive manner.
    Mr. Linder. Mrs. Capps.
    Mrs. Capps. Thank you, Mr. Chairman, for allowing me to 
make this presentation.
    Mr. Linder. Only 3 o'clock in the morning.

STATEMENT OF HON. LOIS CAPPS, A REPRESENTATIVE IN CONGRESS FROM 
                    THE STATE OF CALIFORNIA

    Mrs. Capps. I have two amendments, and because of the 
emergency nature of this hearing, I will be as brief as I can 
be. The first is I think it is titled number 001, called the 
national plan amendment. A better title would be a backup plan. 
In this amendment, Centers for Medicare and Medicaid Services, 
we know them as CMS, would offer standard coverage as a 
prescription drug plan throughout the United States as a backup 
plan. The coverage that would be offered would be the benefit 
outlined in the Majority bill. So there would be no difference, 
but it would make sure that in the event that the insurance 
plans did not stay in a particular area that traditionally has 
been underserved, a senior would know that there would be this 
fall-back plan that would give them the same benefits that 
would only be used in reserve.
    I actually think this would really go a long way to help 
sell, if you will, this new Medicare plan, because my 
experience with seniors, with the only knowledge they have had 
about insurance companies combined with Medicare, the 
Medicare+Choice plans, has been rather negative because they 
have seen the plans come in in underserved areas like I 
represent, the rural area. The plans come in and offer a lot, 
and then pretty soon they raise their premiums and cut back on 
the benefits, and then pretty soon they have gone. And I have 
already heard some concern about the idea of having the same 
kind of insurance companies be this partner with Medicare.
    So I am hopeful that you will look seriously at this idea 
only as a reserve plan, but having the senior know that in the 
event that there wasn't any HMO available in their area, that 
they wouldn't be left high and dry. That is the first 
amendment.
    And then the second amendment is one that I am submitting 
called the Norwood-Capps cancer cap amendment, and I think the 
number is 59. The actuality is that the base bill that we went 
through in the commerce energy committee, this base bill 
threatens quality cancer care. It actually cuts cancer care 
funding by 30 percent, or $500 million. This is because of the 
way that the average wholesale price has been indexed for 
oncologists. And we need to fix this. This is our 
responsibility as part of how Medicare is financed. We also 
have to make sure that oncologists are paid properly.
    And so this amendment is based on H.R. 1622, which I have 
coauthored with Representative Norwood, which this bill has 
already gained strong bipartisan support. This amendment, then, 
based on this bill, offers a more accurate payment for oncology 
drugs, just really comes clean with how we have been doing it. 
But what oncologists have been doing since Medicare came into 
being before there really was oncology service in the full 
sense of the word in comprehensive cancer care, oncologists 
have used the overpayment of the drug to pay for the services.
    The Chairman. Average wholesale price.
    Mrs. Capps. Exactly. And that is wrong. We need to fix it. 
But we also need to make sure that cancer care continues to be 
delivered. And so the amendment would allow for that delivery 
of services by the oncology community really, nurses and other 
professionals who deliver the care.
    Oncology treatment is rather severe in many instances and 
needs to have this service to make it work, so I hope these 
amendments will be considered by the Rules Committee.
    Mr. Linder. Ms. Pryce.
    Ms. Pryce. Thank you all.
    I am interested in your second amendment. Do you know how 
it differs from the average sales price plus 12 percent that is 
in the base bill?
    Mrs. Capps. It has a different formula for doing it. It 
would reimburse the oncologists for the medication. The way the 
base bill does it, the patients would have to come 2 days in a 
row because the oncologist would have to see the patient, do 
the blood work and all that, and, based on that, order the 
medications. So they would have to make two trips. The base 
bill would be very costly for the Medicare recipient.
    This bill would allow the oncologists to stockpile, if you 
will, so that they can have the medications on hand, but it 
would charge I think it is 12 percent more, which is a standard 
rate, than the actual wholesale price. It is based on the sales 
price.
    Ms. Pryce. The Chairman explained to me that the base bill 
provision would allow a stockpile, and so that is why I am just 
concerned, and he worked with Charlie on it. I will try to 
clear that up in my own mind.
    Mrs. Capps. In my discussion in Energy and Commerce, it did 
not do that. There has been a lot of work since that happened, 
and if we can improve it, we should. But that is only one of 
the issues that is of concern to us. The wider issue is the 
lack of ability to reimburse for the oncology services.
    Ms. Pryce. The practice expense.
    Mrs. Capps. Which also need to be transparent and need to 
be acknowledged as part of cancer care.
    Ms. Pryce. It is my understanding it is well tended to in 
this bill, so thank you.
    Mr. Linder. Mr. Frost.
    Mr. Frost. I support the gentlewoman's amendment on 
oncology and hope we have the opportunity to vote on it.
    Mr. Linder. Mr. Hastings.
    Mr. Hastings of Washington. No questions.
    Mr. Linder. Mr. McGovern.
    Mr. McGovern. I support all of your amendments, and, Lois, 
especially the one on oncology. And I think it raises the issue 
I think that a lot of us are concerned about. No one really 
knows what has been taken care of and what has not. People on 
the Majority side can't tell you definitively that this has 
been fixed or hasn't been fixed. That is not good enough on 
something like this.
    Ms. Pryce. How good would you like it to be?
    Mr. McGovern. I would like definitively.
    Ms. Pryce. I can tell you what the Chairman said.
    Mr. McGovern. And he said a lot of things in the past, 
quite frankly, that haven't come true.
    The fact of the matter is all these things affect real 
people. For us to sit up here and say, well, I can assure this, 
or I think this might be, or this might be the case, or that 
might be the case, it is just not good enough. There are a lot 
of questions, and we are rushing this thing through here 
tonight. Nobody has read this thing, and tomorrow it is up on 
the floor. We are going to have a structured rule, limited 
debate, and people are not going to have an opportunity to 
offer different perspectives.
    This is outrageous, and there is no excuse for it. We are 
told this is an emergency, and we have to be here under 
emergency situation. The Chairman of the Rules Committee, all 
he said when it was an emergency was that he wanted to do it. 
That was it. That is all we need to do to declare an emergency 
so we don't have 24 hours to review this bill. I mean, that is 
absurd. This stuff is important. And the only emergency here is 
they want to rush this thing to the floor before anyone reads 
it, and then they might not vote for it.
    Here is a description of how you get your prescription 
drugs under the Republican plan. I don't know about the senior 
citizens you represent, but my senior citizens are looking for 
simplicity and a guaranteed benefit. They don't want thousands 
of bureaucrats telling them they can do this, they can't do 
that. They want something that is understandable. And clearly 
this bill that is coming through here is anything but simple. 
It is convoluted and doesn't provide people security, and this 
whole process just stinks. And I can't--I mean, here we are at 
3 o'clock in the morning, and we can't answer some basic 
questions about what is in this bill and what is not, and it is 
the wrong way to do this.
    Mr. Pallone. If the gentleman would yield for a moment. I 
think you are very much on point. I have been listening to what 
the Republicans have been saying tonight in the committee, and 
essentially almost everyone has said that there is a real 
problem here with Medicare, and we have to fix it. We have to 
come up with all kinds of ways to change it and do different 
things because the assumption is that there is a huge problem 
with Medicare, and it is simply not true. I think seniors don't 
feel that there is a problem.
    Ms. Pryce. Would the gentleman yield? You don't think the 
imminent bankruptcy is a problem? I mean, it is a serious 
problem. If you want it to go bankrupt, then we do nothing, and 
we have done nothing. And if you don't, we have to fix it.
    Mr. Pallone. The gentlelady from Ohio, let me just say I 
respect you a lot, and I like you, but the bottom line is that 
the crisis in terms of the funding has been created by the 
Republicans because of their fiscal and tax policies.
    Ms. Pryce. And we can argue that until the cows come home.
    Mr. McGovern. I would simply say we are jeopardizing 
Medicare by tax cuts that were not paid for. And I am all for 
making sure that we can keep Medicare alive and well, but 
privatizing Medicare is not the way to do it. But I support 
your amendments, and we are going to try to make them in order.
    Mr. Linder. Mr. Sessions.
    Mr. Sessions. I have no questions.
    Mr. Linder. Mr. Hastings.
    Mr. Hastings of Florida. I support all three of the very 
thoughtful proposals, Mrs. Capps' and our colleagues', and 
support the statements that Mr. McGovern said. Four o'clock, I 
am going to say my statement more vigorously.
    Mr. Linder. Mr. Reynolds.
    Mr. Reynolds. No questions.
    Mr. Linder. I would like to call to the table Mr. Gutknecht 
and Ms. Kaptur. Welcome to the Rules Committee at the 
delightful hour of 3:10. Ms. Kaptur, any statement you might 
have will be submitted to the record.

 STATEMENT OF HON. MARCY KAPTUR, A REPRESENTATIVE IN CONGRESS 
                     FROM THE STATE OF OHIO

    Ms. Kaptur. Thank you, Mr. Chairman, very much. I will 
summarize in view of the time. I thank you, and I thank Mr. 
Frost and all of the Members here. I know it is not your choice 
to be here so late. I feel sorry for all of you and feel sorry 
for us, and I know I am going to feel sorry for the American 
people after tomorrow.
    But I am here tonight to try to make this bill better, from 
what I know of the bill, and I am heartened in my appearance 
this evening by Claude Pepper looking over our shoulders. I can 
remember as a new Member here in March of 1983 him giving one 
of the most magnificent speeches I have ever heard as we 
refinanced the Social Security System, which has now served us 
another 23 years, and kept millions and millions and millions 
of American families whole, and given their parents and 
grandparents dignity in their last years, and it was one of the 
finest votes I have ever cast.
    We have a very important vote in front of us likely 
tomorrow, maybe Friday. I am not sure. And the amendment that I 
am proposing here would try to deal with the issue that Ms. 
Pryce talked about, and that is the cost of prescription drugs. 
And my amendment essentially would provide the authority to the 
Secretary of Health and Human Services to provide for the 
negotiation of prices of covered outpatient drugs under 
prescription plans and what are termed MAEFFS prescription 
plans in the same manner as the Secretary of Veterans Affairs 
provides for the negotiation of prices of prescription drugs in 
conjunction with the procurement of those drugs.
    Remember back after 9/11 when Secretary Thompson did such a 
good job of negotiating price on the procurement of 
immunizations for smallpox, and it was pretty tough, but he did 
it, and he got a better price for America. And all we are 
asking for here is that same type of rigor. The idea of our 
amendment is for getting the best competitive bid for a given 
drug. For example, if any of us were to go out to a pharmacy 
out there today and try to buy a commonly used drug for high 
blood pressure, I will just use one name, Norvast, it is likely 
we would pay about $134.99. The Department of Veterans Affairs 
has negotiated a price of $102.11 cents. That is a $32.88 
difference, and that is not only a difference for any one of 
us, but for the senior citizen, who can save $32. That is a 
very significant savings. In many cases, the Department of 
Veterans Affairs has a lot better pricing than even under the 
Canadian system; not always, but many, many times. The same is 
true with the Department of Defense.
    This amendment, in sum, would essentially replace section--
I want to give you the exact number here--1809(c)(1), and would 
add this--would add this section as a replacement.
    Let me just say that if you think about our country and our 
free enterprise system, the idea of competitive bidding is 
really essential to getting the best price. That is how you 
really determine price in the market. And we also know that 
insurance plans--one of the Members was talking about, having 
sold insurance, if one looks at the whole concept of insurance 
pricing, and they could group people in order to get the best 
price, this is the same concept obviously in the acquisition of 
prescription drugs. It is the same that we do with bulk buying. 
Whether you are buying milk for children in schools, or whether 
you are buying widgets for automotive manufacturing, bulk 
buying makes sense.
    And so we just ask the committee's indulgence to offer this 
amendment tomorrow or Friday, whatever the day is. And let me 
just say that as I speak here tonight, I can think of lots of 
people over my years in Congress that have come to me, but one 
in particular. A man came up to me in Columbus, Ohio, recently, 
terminated worker out of a major manufacturing company. He had 
big tattoos on both arms. I said, sir, are you a marine? Yeah; 
58 years old, 28\1/2\ years at that company that closed its 
doors. But his--he was there because of his wife, whose drugs 
were costing $1,800 a month, and I really couldn't help him.
    And so I know the extraordinary importance of this measure 
that we will be debating, but I also know that with this 
amendment, we would get the best price, better than the market 
would offer by itself, because a group buying provision always 
saves money. So I would ask the committee's indulgence, and I 
would hope that you would find a way to allow this amendment to 
be put in order and let us debate it on the merits and find the 
best answer for the American people. Thank you very much.
    Thanks, Claude. I love you.
    Mr. Linder. Mr. Gutknecht.

 STATEMENT OF HON. GIL GUTKNECHT, A REPRESENTATIVE IN CONGRESS 
                  FROM THE STATE OF MINNESOTA

    Mr. Gutknecht. Well, Mr. Chairman, it is late, and I will 
try to be brief, but the issues before us are big, and the 
questions that you have raised and others have raised with 
regard to what the ultimate cost of this provision is going to 
be, this bill, are serious matters, and we ought to consider 
them for a while.
    We asked what the Congressional Budget Office estimates the 
costs are going to be, and it is somewhere between $390 and 
$400 billion over the next 10 years. But, Members, I would at 
least caution you that the Congressional Budget Office has been 
wrong far more often than they have been right, even in 
estimating their own budget. They have been off by $1 trillion 
in their estimates. Now, that is not a small amount, and my 
estimate is that they are off in the estimates of the cost of 
this bill.
    The reason I say that--and I am not by any means an expert, 
but I have spent a good part of the last 4 years learning about 
the prescription drug industry and the way prices are set, and 
it is the most confusing thing I have ever seen. With all due 
respect to my colleague from Ohio, the idea that we will be 
able to negotiate better prices is not exactly true, and let me 
give you an example, and this is from the Office of Personnel 
Management. The prices that they are able to negotiate on 
behalf of the Federal Employees Health Benefit Plan, let me 
give you some of the prices very quickly. For a drug like 
Coumadin, the BlueCross BlueShield Federal Employees Plan's 
price is $55.31; for the mailhandlers' plan, which is a fairly 
large group, is $72.24; for the HMO plan that you can 
participate in here in Washington, it is $69.58. That same drug 
can be bought in Europe for $15.80. That story gets repeated 
again and again.
    Now, in some respects I probably should be doing a victory 
dance because they did put a provision in here which supposedly 
will open up the market to Canada, but there are two, as was 
alluded by Ms. Slaughter--there are poison pills that are 
included in that provision. Let me read them for you. The 
conditions are that, number one, that this pose no additional 
risk to the public health and safety; and, number two, that 
they result in a significant reduction to the cost of 
prescription drugs to American consumers. I am not sure what 
``significant'' is. Is it half? And more importantly, who will 
determine that?
    And so we have crafted an amendment on a bipartisan basis 
that would, first of all, put in place a regimen to require the 
Secretary to begin to do what the Congress has said repeatedly 
we want done, and that is to open up markets so Americans can 
have access to prescription drugs from the industrialized 
countries. We are not talking about Mexico or developing 
countries. We are only talking about the industrialized 
countries. I think that makes sense.
    The second thing that is in the amendment that will be 
before you, and hope we get a chance to vote on it, is a 
provision from Congresswoman Emerson that is identical to the 
Senate language relative to generic drugs. We simply have to 
stop the pharmaceutical industry from gaming the system.
    And the third provision, perhaps Congressman Engle can 
speak about in terms of getting some kind of rate of return 
from the enormous amount of taxpayers' dollars that we invest 
for research.
    Mr. Linder. Mr. Emanuel.

 STATEMENT OF HON. RAHM EMANUEL, A REPRESENTATIVE IN CONGRESS 
                   FROM THE STATE OF ILLINOIS

    Mr. Emanuel. Thank you very much. Good morning.
    The basic point of this bill was to use market forces to 
reduce prices, whether that is generic versus name brand; 
access here in America versus the same prices that our German 
consumers are paying, England's consumers are paying, French, 
Italian, New Zealand and Israel; using that market to drive 
prices down.
    And the third component of this is that through our NIH 
funding, taxpayer-based funding, we are funding, all the cancer 
drug products and cancer drugs on the market are developed with 
taxpayer-based dollars. All the AIDS drugs are developed with 
taxpayer-based research.
    And in the private sector usually you look for a 30 percent 
return on investment. We are talking about 10 percent return 
here for the taxpayer dollars. And that would give basically--
the truth is the NIH is one of the--it would return money to 
the taxpayers for the research they have been funding. And 
basically over 10 years, the NIH becomes self-funded.
    So it uses the market principles, whether it is name brand 
versus generic, and access here in the United States, 
competitive prices around Europe, and also making the NIH what 
it really is. And it doesn't demand prices, doesn't command 
prices; it uses market forces to reduce prices.
    And everybody, regardless of where you live or where you 
are from, knows that one of the debates here is about 
affordability. I believe in the free market. I have seen it 
work, and this bill in a bipartisan fashion uses the market 
forces to bring prices down.
    Mr. Linder. Thank you.
    Ms. Kaptur, before you go much further in touting the value 
of the smallpox negotiations, I would like to inform you that 
the $13 per liter of immunoglobin that was negotiated is now 
$265 per liter.
    Ms. Kaptur. Could I say, because Mr. Gutknecht commented on 
my proposal, I didn't comment on their proposal, if I could 
just respond that the operative provision of our measure is the 
Department of Veterans Affairs.
    I referenced the Secretary's negotiation, which received 
very good press. I wasn't aware of that.
    Mr. Linder. This was recently.
    Ms. Kaptur. And also Mr. Gutknecht and Mr. Emanuel's bill 
does not have the Department of Veterans Affairs regimen on 
here, and I think it has good experience, and maybe Secretary 
Thompson could use it.
    Mr. Hastings of Washington. No questions.
    Mr. Frost. No questions.
    Mr. Linder. Mr. Sessions.
    Mr. Sessions. No questions.
    The Chairman [presiding]. Mr. McGovern.
    Mr. McGovern. I support your amendments, and I think they 
are very thoughtful, because the issue of affordability is key 
to many people. That is the big issue. I mean, we could talk 
about a benefit or a subsidy that we are going to provide to 
people, but if the cost of drugs go up, then what are we doing 
here?
    So I think all of you maybe have different approaches to 
this, but clearly they deserve to be debated on the House 
floor. And again, I appreciate your thoughtfulness here.
    Mr. Gutknecht. Mr. Chairman, if I could say this issue is 
not going to go away. If 1 year from now our consumers are 
still paying $360 for tamoxifen, and the Europeans are buying 
it for $60, it is not going to be shame on the pharmaceutical 
industry, it will be shame on us.
    Mr. McGovern. What do you think is the reluctance of the 
administration to embrace your proposal?
    Mr. Gutknecht. You would have to bring them in.
    The Chairman. Mr. Reynolds.
    Mr. Reynolds. No questions.
    The Chairman. Mr. Hastings.
    Mr. Hastings of Florida. Thank you, Mr. Chairman.
    You know, this bill specifically prohibits the Secretary of 
Health and Human Services from negotiating cheaper prices for 
prescription drugs, and I don't know how that helps the people 
Medicare is designed to serve. For the life of me, I don't. And 
I don't know Secretary Thompson, who happens to be the 
Secretary at this time. But I had the good fortune of being at 
the Ambassador of the United States to Italy's dinner that I 
was invited to by Mel and Betty Sembler, who are Republicans, 
and big heavy-hitters, and Tommy Thompson was there, and he 
made a speech that night. And he had just come from America, 
and he was talking about the fact that he had knocked heads 
with drug companies trying to get them to lower prices. So 
apparently this present Secretary isn't hesitant at all to 
undertake to do something.
    And, Ms. Kaptur, perhaps you can answer it best. I support 
all three of your very thoughtful amendments. To prove I don't 
have a life, I have been up at night listening to Mr. Gutknecht 
talk about this in Special Orders. I know very well what it is 
like, but how is it going to help people that the Secretary is 
prohibited from negotiating?
    Ms. Kaptur. I was baffled to read that provision in the 
original draft that came out of the committee. I don't know if 
it has been removed or not, but on the thought that it has not 
been removed, I really don't understand, because what it 
essentially does it sets up an entitlement for the 
pharmaceutical companies to charge the highest price. There 
really isn't any competition in the system and----
    Mr. Gutknecht. I agree absolutely, and I wasn't trying to 
undercut what Ms. Kaptur was trying to do. It is just that 
there is a belief among some of our people that we are going to 
be able to negotiate some of these great prices. My point that 
I am making with the Federal employees plan is we don't 
negotiate very good prices now relative to the rest of the 
world. If you are really serious about bringing prices down, 
you have to introduce some level of competition. It is called 
parallel marketing. And that is why the Europeans have cheaper 
prices.
    Mr. Hastings of Florida. Do you have any comments on that?
    Mr. Emanuel. I just think that if you want to get the $400 
billion or whatever it ends up being, if the spread is 5-, you 
are going to get the most bang out of the buck. You bring 
competition. We are not only talking about adding prescription 
drug benefits to Medicare. One of the things we all care about 
is affordability. We are talking about here in our amendment to 
use the market forces to bring to bear, and allows people in 
the United States who have paid many ways for the research for 
these drugs to get the same prices that people in Germany, 
people in France, people in England, people in Italy or Israel 
and Canada are paying.
    And using market forces to reduce prices--globalization is 
supposed to be a benefit. Let us make globalization work for 
taxpayers, government, Medicare, private sector--and a lot of 
businesses are drowning by the price of their health care. Of 
course, that is being driven not only by the uninsured, but by 
the costs of medication. I have faith in the private sector, 
and I hope every Member has the same faith that we have in the 
private sector to bring down--and in the marketplace to bring 
down prices.
    Mr. Hastings of Florida. The fact of the matter is that 
this new Medicare agency is precluded from using its marketing 
power.
    And I want to follow up what I said about Secretary 
Thompson. I thought he was very forthcoming on that particular 
evening and was really riding high that he accomplished 
something. What he was talking about is that the VA directly 
negotiates with drug companies for prescription drugs, and 
Secretary Thompson negotiated with the manufacturer of the 
antibiotic Cipro and was able to cut prices by more than half. 
Now, if he can do that in that instance, I don't understand why 
we would pass a measure--and it just happens to be Tommy 
Thompson. Today it may be somebody, tomorrow or some other 
point in the future, that would have that authority that would 
allow this kind of market power to be negotiated rather than 
all of this talk about markets and competition. I mean, that is 
real power, and to take it away from the Secretary to me is 
beyond the pale.
    The Chairman. Thank you very much, Mr. Hastings, and 
thanks, all of you, for being here. We appreciate your 
testimony.
    Next I would like to call the gentleman from Texas, Dr. 
Burgess, and the gentleman from Georgia, Dr. Gingrey. If the 
two of you would come forward.

STATEMENT OF HON. MICHAEL BURGESS, A REPRESENTATIVE IN CONGRESS 
                    FROM THE STATE OF TEXAS

    Mr. Burgess. Thank you, Mr. Chairman.
    We just heard some discussion about drug affordability 
affecting accessibility for our seniors, and I think we have 
got to keep first and foremost in our minds patients' safety.
    I actually have two amendments that I would like to discuss 
this evening. The first does deal with affordability of 
medications. This amendment would require the General 
Accounting Office to conduct a study on foreign prescription 
drug prices to show how they impact the United States 
consumers. The amendment would also require the General 
Accounting Office to determine if and to what extent the United 
States Trade Representative engages in negotiations with 
foreign governments to facilitate the elimination of price 
controls under the Trade Promotion Authority Act of 2002.
    With the approval of a multibillion-dollar Medicare 
entitlement that will increase the utilization of prescription 
drugs, it will be important that our government is able to 
implement market-based solutions to hold down the cost and to 
ensure patient safety. In order to do so, policymakers must 
have important information as to the extent of foreign price 
controls that impact the United States consumer market. To 
complement this data, the study authorized by this amendment 
would also look into the United States Trade Representative 
efforts in eliminating anti-free-market regulations as part of 
free trade negotiations under the Trade Promotion Authority Act 
of 2002.
    And let me just add, never in my wildest dreams did I ever 
think that I would be up here on the side of the FDA, but after 
hearing the other comments coming from the individuals, it is 
clear to me that we need data in order to make these decisions, 
and with all respect to the gentleman from Minnesota, who has 
done his own data collection, I believe we need data collection 
done for this body and not as independent practitioners. We 
have an incredible record of safety in this country that I do 
not believe we should sacrifice. We do not want drugs for our 
seniors at any price. I think we do need to ascertain where the 
interference with the free market has occurred, and to the 
extent with other governments that have engaged in predatory 
practices, I believe that should be corrected.
    The second amendment that I have is largely technical in 
nature and deals with section 409 of the--of at least the bill 
that I saw from the Ways and Means Committee from last week. 
And this amendment, the current bill would allow a nurse 
practitioner to act as an attending physician, perhaps contrary 
to state medical licensing regulations, to provide Medicare and 
hospice care. This amendment would not prohibit a nurse 
practitioner from providing care as an attending physician, but 
would allow them to do so in accordance with State practice 
guidelines and under the supervision of a physician.
    A physician is responsible for managing the health care of 
patients in all practice settings. Health care services 
delivered in an integrated practice must be within the scope of 
each practitioner's professional license as defined by State 
law. In an integrated practice with the nurse practitioner, the 
physician is responsible for supervising and coordinating care 
with the appropriate input of a nurse practitioner, ensuring 
the quality of care provided to patients.
    And I understand that it was felt that the language that 
was contained in the original bill did not actually give the 
nurse practitioner the amount of authority that I assume that 
it did. I would ask that this technical amendment be made to 
clarify this issue so it will be clear and unambiguous for 
those coming after us.
    The Chairman. Dr. Gingrey.

 STATEMENT OF HON. PHIL GINGREY, A REPRESENTATIVE IN CONGRESS 
                   FROM THE STATE OF GEORGIA

    Mr. Gingrey. Thank you, Mr. Chairman and members of the 
Rules Committee.
    My amendment is--first amendment is in title 5 regarding 
the funding of the hospitals, and this has to do with the 
market-basket issue. The Hospital Market-Basket Index is a 
measure of inflation in the price of items and services 
hospitals must purchase in order to provide care. Like similar 
measures, such as Consumer Price Index or Producer Price Index, 
a hospital market-basket index measures changes in price, not 
changes in volume. If, for example, hospitals use more drugs to 
keep up with increased patient need, the corresponding increase 
with hospital drug costs would not be captured by the Hospital 
Market-Basket Index. Only changes in the base price of drugs 
would be reflected. The increased use of drugs not reflected in 
the Hospital Market-Based Index would have to be included in 
the science and technology or other components of the update 
framework.
    Market basket reductions. The House bill contains 
approximately $22 billion for target payments for hospitals. 
However, $12 billion in savings from the hospital market basket 
reductions, the minus .4, brings the total net benefit of the 
hospitals to about $10 billion. The Senate bill contains $22 
billion in hospital relief and no reductions. Under the Senate 
bill hospitals will receive the full market basket for the 
foreseeable future. If the House passes legislation including 
payment reductions, that vote could bring down the value of a 
hospital provision in conference.
    The new prescription drug benefit will keep beneficiaries 
out of the health care system and thus create an overall 
systemwide cost savings; however, as volume decreases, economic 
trends indicate that first service costs will increase. 
Therefore, Congress should not preemptively reduce payments to 
providers at the same time when costs are likely to increase. 
Providers in general should be allowed inflationary adjustments 
to keep pace with overall rising costs of health care. We 
should not reduce provider payments to pay for prescription 
drugs even before the bill is enacted. Again, the Senate has 
not had to resort to this.
    Medicare is the largest health care program, making up 
almost 50 percent of all hospital payments. Mr. Chairman, in my 
district, this provision would cause my hospitals to lose $2 
million. If this amendment is accepted, we gain about $14 
million, this bill, this $400 billion prescription bill that we 
are going to provide for our seniors, and I think that is a 
wonderful thing. And I think that in the final analysis that 
this $400 billion cost estimate will save us money, because I 
think basically what is going to happen is that when people 
have an opportunity to take needed prescription medications for 
blood pressure or diabetes or whatever, you are going to have 
less expenditures on hospital care. You are going to have less 
hospital admissions, fewer hospital admissions, shorter lengths 
of stay, hopefully, because you are going to reduce the number 
of heart attacks and stroke. You are going to have less 
admissions to skilled nursing homes and extended periods of 
stay.
    Basically what this provision is going to do, it is going 
to create a benefit for our seniors that they never had before, 
and I think that is great, but it is going to cut down on the 
volume that hospitals are seeing today. It is just like if you 
cut down on the number of admissions to a hotel chain and the 
length of stay there, it is going to cost them a lot of money. 
I think from the standpoint of hospitals, they are going to 
have to take that hit. But also at the same time reduce this 
market basket below 100 percent is hitting them with a double 
whammy, and I don't think it is right, and they can't afford 
that, and I know the hospitals can't afford it.
    The Chairman. Thanks to both of you.
    Mr. Linder.
    Mr. Linder. I would like to ask unanimous consent to submit 
the statement of Dr. Weldon, a physician in the House, who has 
an amendment.
    The Chairman. Without objection, Dr. Weldon's statement 
will appear in the record.
    [The prepared statement of Mr. Weldon follows:]

 Prepared Statement of Hon. Dave Weldon, a Representative in Congress 
                       From the State of Florida

    Mr. Chairman, I, along with my colleagues Rep. Sessions (TX), Rep. 
Fletcher, M.D. (KY), Rep. Burgess, M.D. (TX), Rep. Gingrey, M.D. (GA) 
who have joined me in offering this amendment, strongly urge the Rules 
Committee to either strike Section 942(d) from the Medicare bills 
reported out by the Ways & Means and Energy & Commerce Committees or 
allow me to offer an amendment to strike this provision from the bill 
when it is brought before the House for consideration. We know what an 
onerous burden this would mean to every physician involved in private 
practice across this country.
    Mr. Chairman, my amendment (numbered WELDON.001) strikes section 
942(d) of the bill. Section 942(d) would allow the Secretary of HHS to 
bypass the requirement that the Secretary receive a report from the 
National Committee on Vital Health Statistics (NCVHS) prior to 
considering whether to adopt a new, untested coding/billing system 
(ICD-10) for physicians. The amendment would simply allow the NCVHS to 
report, so that the Secretary has the full information prior to making 
a decision regarding ICD-10.
    In 2002, the House of Representatives passed legislation to provide 
physicians and other providers with regulatory relief by a vote of 409-
0. Just before marking-up a similar bill this year--H.R. 810, 
``Medicare Regulatory and Contractor Reform Act of 2003'', a new 
provision was slipped in concerning the coding system ICD-10 
(International Classification of Diseases, 10th Revision). This 
provision would allow the Secretary of HHS to adopt ICD-10 without 
receiving a recommendation from the National Committee on Vital Health 
Statistics (NCVHS).
    Now this problematic provision has been inserted into the 
prescription drug legislation, H.R. 2457/2473, ``Medicare Prescription 
Drug Modernization Act of 2003.'' This language is so onerous that it 
has divided the coalition which once strongly supported the regulatory 
relief legislation, H.R. 810. Though slightly different, both the Ways 
and Means version and the Energy and Commerce version of section 942(d) 
present substantial problems for virtually all physicians, providers, 
and payers (private, state, and federal).
    ICD-10 Provisions Increase the Regulatory Burden on Health Care 
Providers--Section 942(d) undercuts one of the underlying purposes of 
Medicare modernization by increasing the regulatory burden that the 
Centers for Medicare and Medicaid Services (CMS) imposes on physicians 
and other providers. In part, the regulatory relief legislation was 
intended to reduce the unnecessary burdens associated with the Medicare 
program--not exacerbate them.
    The ICD-10 provision would dramatically increase the administrative 
hassles associated with coding for physicians, providers, contractors, 
payors, and the federal government. Every physician will be forced to 
master 170,000 new procedure codes and a foreign vocabulary.
    Rushing to ICD-10 is a Government Takeover of a Private Sector 
Process--Rushing swiftly to ICD-10 amounts to a government takeover of 
a now private process. CPT, the coding system all physicians now use, 
is developed and maintained by private sector experts and a 
representative from CMS. Led by the American Medical Association (AMA), 
CPT is managed by a multi-specialty, cross-disciplinary editorial panel 
that provides CPT at no cost to the federal government.
    The challenge of moving to ICD-10 in lieu of CPT will require 
significant government efforts to develop and maintain the code set 
itself, replacing a successful private sector partnership that costs 
the government nothing.
    The Cost of Moving to ICD-10 Could Be Significant to Government and 
Private Sector--A Coopers and Lybrand 1989 cost analysis of the costs 
for a newly developed code set and its implementation in 1997 dollars 
approached one billion dollars. CBO did not score section 942(d), 
because the Secretary ``may'' implement ICD-10.
    The direct and indirect costs of implementing ICD-10 should not be 
underestimated. It is vastly different in terms of design, intent, 
structure, and maintenance. Setting up this structure will require 
significant investments to convert existing software or acquire new 
hardware to complete billing and medical records, including training 
and hiring more sophisticated staff coders. Not unlike the ripple 
effects of new HIPPA regulations, the complete reorganization of a 
physician's office to comply with this rule would be required.
    ICD-10 Was Not Designed for Physician Office Use In Mind-ICD-10 is 
an entirely new system to impose on American medicine and would come at 
great expense to the private sector and the government. The current 
ICD-10 system has no billing codes for physician office visits, which 
account for 30% of physician services. The language would impose a new 
lexicon on physicians, because it does not conform to traditionally 
named body systems and instead adopts clinically meaningless 
distinctions. Currently named and used medical procedures (i.e., 
Whipple procedure) will instead be replaced with a host of different 
codes based on clinically meaningless distinctions, making the practice 
of medicine and billing a new, unfamiliar bureaucratic nightmare. While 
some countries partially use ICD-10 diagnostic codes, no country uses 
the ICD-10 PCS codes that Section 942(d) would allow to be imposed on 
physicians.
    ICD-10 Language Unnecessarily Circumvents an Advisory Body Doing 
Its Job--Section 942(d) allows the Secretary of HHS to adopt ICD-10 
before receiving a recommendation from its own advisory body. The 
NCVHS, the statutory public advisory body that provides HHS with 
recommendations on health data, statistics and national health 
information, is currently considering adoption of ICD-10 as a 
replacement for ICD-9.
    Before making a decision, NCVHS is awaiting the results of a RAND 
study measuring the cost and impact of implementing ICD-10 on the 
inpatient hospital environment. The study will be completed in August 
2003. A recommendation based on the results of that study is expected 
by the end of this year. Therefore, rushing action by including the 
ICD-10 language in the Medicare prescription drug legislation is 
completely unnecessary.
    The Transition to ICD-10 Would Disrupt Payments--The transition 
would likely require a system-wide disruption to revise all resource-
based relative value scale (RBRVS) units used in reimbursement 
methodology, another cost to the government, which will also delay 
physician payments.
    RBRVS has annual government expenditures of over $59 billion per 
year and is tied inextricably to the coding system for Part B services. 
Moving from a coding system of fewer than 10,000 codes for physician 
services to a coding system of more than 170,000 codes would result in 
a massive upheaval in payments to physicians and other Part B 
providers. Further, the potential for inaccurate coding would increase 
exponentially. With a seventeen-fold increase in the number of codes, 
more inaccurate payments would occur which, in turn, could increase 
fraud and abuse concerns.
    Finally, I would commend to you the attached list of medical 
specialty organizations representing tens of thousands of physicians 
across this nation, who are supporting our efforts to have this 
provision removed from the bill.
    Let's removed this onerous provision and allow NCVHS to complete 
the report that they were asked to do. Let's not thwart the process by 
rejecting the successful government-private sector partnership that has 
worked so well. Let us protect the federal government and the private 
sector from potentially huge costs, and prevent a serious disruption in 
payments to healthcare providers by striking section 942(d), the ICD-10 
Language.
    [The information follows:]
    [GRAPHIC] [TIFF OMITTED] 89585A.012
    
    [GRAPHIC] [TIFF OMITTED] 89585A.013
    
    The Chairman. Mr. Frost.
    Mr. Frost. I would like to welcome my colleague from Texas. 
He is a very instructive new Member of this body, and he brings 
a lot of expertise and enthusiasm.
    The Chairman. Ms. Pryce.
    Ms. Pryce. Thank the gentlemen.
    Very thoughtful provisions. We have been working with the 
hospital association, and we have improved the association from 
where it began, and I understand my district is even worse than 
yours, way worse than yours. So I understand where you are 
coming from.
    The Chairman. Mr. McGovern.
    Mr. McGovern. I want to thank both Dr. Gingrey and Dr. 
Burgess for their testimony. I am not sure if I will vote up or 
down on the floor, but I support your right to offer them.
    Dr. Burgess, maybe I am not quite reading correctly, but 
your GAO study, your first amendment you are talking about, it 
almost sounds as if you are kind of trying to figure out a way 
to get Europeans and the Canadians to raise their drug prices 
so that our prices don't sound so bad.
    Mr. Burgess. I believe they should pay their fair share. I 
believe that that cost should be distributed equally across all 
populations that are enjoying the benefits of pharmaceutical 
advances that we have made in this country. I think it is 
outrageous that we ask our poor and our uninsured and our 
Medicaid seniors to pay the highest cost for prices, thereby 
subsidizing drug purchases in other countries. It is a scandal.
    Mr. McGovern. I agree with you it is a scandal. We are 
gouging our own people, but I think there has to be a way to 
make sure it is affordable for people in this country and other 
people as well.
    Mr. Burgess. With all due respect, I honestly don't care 
what drug prices are in Canada. Canada has a system that is 
largely dependent upon the largesse of the United States. They 
would not have a medical care system if it were not for us, and 
the fact that we are subsidizing their citizens' pharmaceutical 
purchases, I can't understand why we allow that to continue.
    Mr. McGovern. I agree with your frustration in the sense 
that we don't seem to care much about our own people here and 
allow the gouging to go on here, and these pharmaceutical 
companies get away charging huge amounts. So I was trying to 
follow what the point was, but you have explained. Thank you.
    The Chairman. Mr. Diaz-Balart.
    Mr. Diaz-Balart. I thank both of you.
    The Chairman. Mr. Hastings.
    Mr. Hastings of Florida. Mr. Chairman, this is a good 
example of having expertise from persons that have been on the 
firing line while a whole lot of people that had--a lot of 
people who had responsibility putting this bill together 
wouldn't have a clue about what Dr. Burgess and what Dr. 
Gingrey have talked about; might have gone to visit somebody in 
the hospital, but don't know anything about what they do. I 
think we should listen to Members who have expertise and have 
been on the firing line like both these gentlemen. I admire 
them for coming forward in a forthright manner. How in the 
world could we not make in order an amendment that does what 
Dr. Burgess requests? And all of us--although Dr. Gingrey 
didn't say so, but all of us have hospitals in very similar 
situations to what he is talking about, and if there is to be a 
benefit, then I would hope that all of us would want to make 
his amendment in order.
    So I support them and would make that request that we at 
the very least give them an opportunity to have it voted up or 
down.
    The Chairman. Thank you very much, Mr. Hastings.
    Mr. Hastings.
    Mr. Hastings of Washington. No questions.
    The Chairman. Mr. Sessions.
    Mr. Sessions. Thank you so much for being here.
    Dr. Gingrey, I think--well, I know that I hope that your 
words of encouragement about the future that you have about the 
success of the prescription drug industry to keep people out of 
the hospital will come true. I believe that more of our seniors 
should have an opportunity to participate long term with these 
drugs. The bottom line is that there will be fewer people then, 
hopefully, going to the hospital, which would be a lessening 
demand upon us and our system to build hospitals.
    In Dallas, Texas, where I am from, we are virtually at full 
capacity, and we have problems with getting enough nurses, and 
it is just a huge stress on the system. So I share your 
enthusiasm for this drug plan, robust plan, that will now make 
this available. And I hope that your professional insight, Dr. 
Burgess, and your comfort with what we are looking at will 
mature and come forward. And I thank you for being here. I 
support what you are talking about also.
    Mr. Gingrey. I appreciate that, Mr. Sessions, and I think 
that is exactly what is going to happen. I truly believe that 
this prescription drug benefit to our seniors, which they 
needed for a long time, the success of that program is going to 
result--you know, somebody gains, somebody loses. Hospitals are 
definitely going to lose, and that is good. That means that 
fewer people are going to have to be admitted to hospital with 
very expensive care, long-term care. Same thing with nursing 
homes. Same thing with surgical procedures. A lot of my surgeon 
colleagues are, hopefully, going to be doing less open heart 
procedures. I know well about that because our seniors are 
going to be on medication to lower cholesterol, to thin their 
blood, to do things to keep them out of those hospitals and 
those expensive procedures. And bottom line is that is going to 
cost the hospitals a lot of money, and that is why I feel like 
cutting that market-basket index to minus .4 percent is half 
the double whammy.
    And as Mr. Hastings says, it is not just the 11th District 
of Georgia, it is everybody's district. And, unfortunately, not 
all hospitals in our district are disproportionate share 
hospitals. But that is just a very small percentage of these 
small community hospitals that are not disproportionate shares. 
So I think it is very important we consider this amendment.
    Mr. Burgess. Could I just add to Mr. Sessions' comments? 
When I trained at Parkland Hospital in 1970, breast cancer was 
entirely a surgical illness. In the year 2003, it is becoming 
more and more a medical illness treated with medications, not 
surgery. The hospitalization part will no longer be necessary.
    Mr. Frost. If the gentleman would yield, that is why I 
believe in Ms. Kaptur's proposal. Oncology is very important. I 
had a personal experience in my family with this recently, and 
the follow-up treatment, the follow-up chemotherapy treatment 
administered by oncologists is really remarkable in terms of 
the progress that has been made.
    Mr. Sessions. And that is an exact reason, as Mr. Frost 
knows that cancer strikes many of our families, and the 
inclusion of that in what we are doing--I guess I say it is not 
only just money, but it is also the heart and soul of this 
country because we care about this. And I think that our 
kindness is to take care of people who at times don't have the 
ability to get the most leading-edge drugs.
    So I am just real proud of it, and I share your enthusiasm 
for what the future is.
    Mr. Frost. It is money in terms of oncology because it is 
very expensive, and it is very important, and it does save a 
lot of lives.
    Mr. Burgess. If we are not careful what we do on that 
particular issue, we will drive that therapy from the 
physician's office back into the hospital, which is more 
expensive, and I don't believe that is the intent of the bill.
    Mr. Sessions. If the outpatient clinic, so to speak, does 
not get it either through efficiency or through the ability to 
perform this, we will drive people back into the hospital and 
have to have more people in the hospital and build more 
hospitals, and I think we will have a reverse.
    I thank the gentleman and Mr. Frost for your feedback, and 
I yield back.
    The Chairman. Mr. Reynolds.
    Mr. Reynolds. No questions.
    The Chairman. Thank you very much.
    Mr. Gingrey. Mr. Chairman, I am a cosponsor on the Weldon 
amendment. Can I speak to that?
    The Chairman. His statement has been submitted for the 
record, and if you have a statement that you would like to 
submit as well, we would certainly welcome it.
    Mr. Gingrey. Could I make a statement?
    The amendment that Dr. Weldon is presenting is in regard to 
the ICD 10 codeine provision that is in the mark. And I just 
want to say this: The physicians are faced with a tremendous 
burden with recordkeeping and, of course, HIPPA regulations now 
that we have got a final ruling on that. And as part of this 
provision, to put an additional burden on them with immediately 
going to this ICD 10 change, I mean, I think--we got a study 
that we are waiting on in the next couple of months. I don't 
think it is necessary to make that change right now. Our 
providers are worried about waste, fraud and abuse and trying 
to comply, and mistakes are made, and it is just a very costly 
burden on them, and I would respectfully ask the committee to 
remove that from the bill and let us wait for another day to do 
that. And let us wait for the study to come back.
    The Chairman. Thank you very much, and appreciate you both 
being here.
    Next I would like to call Messrs. Cooper, Dooley, Larson 
and Sanders.
    Mr. Dooley.

 STATEMENT OF HON. CALVIN DOOLEY, A REPRESENTATIVE IN CONGRESS 
                  FROM THE STATE OF CALIFORNIA

    Mr. Dooley. Thank you, Mr. Chairman.
    As we are rapidly approaching sunrise, we almost have the 
opportunity to have our amendment in the nature of a substitute 
considered in the light of day.
    Mr. Frost. But not quite.
    Mr. Dooley. Many of us have been working on a substitute 
that actually has bipartisan support, which we would ask you to 
be allowed to be considered on the floor. What the substitute 
does is that we take the $400 billion that the President has 
said that he would allow for a prescription drug benefit--it 
was also in the budget that passed the Republican House--and 
put that in Medicare Part B, which then we would offer a zero 
premium benefit that would incorporate a prescription drug 
card, much of what President Bush has offered, that would 
provide a high-cost benefit for all seniors under Medicare when 
they have $4,000 in drug costs.
    We also recognize that a lot of our seniors do not have the 
ability to pay--or to pay for their $4,000 in drug costs before 
this high-cost benefit kicks in, so we provide a low-cost 
benefit for people on low income, which provides a 90/10 
benefit up to 150 percent of poverty. And then we also allow in 
those States that will match contributions at the SCHIP rate, 
which varies from anywhere from a 65 to 35 split to an 80/20 
split, a benefit of up to 200 percent of poverty. Up to 200 
percent of poverty we cover almost 50 percent of all the 
seniors on Medicare today.
    So this is a plan that is very simple, and it is a plan 
that would allocate our scarce Federal resources to those 
seniors with the greatest need, and those are the seniors with 
very high drug costs and those seniors with the least ability 
to pay. It also eliminates some of the inherent problems that 
are part of the Chairman's bill that will be considered on the 
floor, and one of those is just the structure of the bill that 
is going to be offered, and that is that the insurance--using a 
private insurance model, which we have many analysts from Wall 
Street who have recently said they have serious doubts whether 
anyone in the private insurance sector will offer this model, 
whether anything will be available. We think that is a gamble 
to go down that path. And also, when we set up as an insurance 
policy, recognize that it might not be something that they are 
going to be excited about, so we set up a separate system in 
the bill that would actually allow for the Federal Government 
to buy down the underwriting risk.
    Mr. Dooley. Well, we are sending a message to any insurance 
company out there under the chairman's mark, that if you 
withhold from the market, is that the Federal Government will 
come in and assume a greater portion of your risk. And, you 
know, this is something that we think is a serious, serious 
flaw.
    The other issue which I think that we have to be very 
concerned with, is we alleviate in our bill, because we use 
total drug cost to trigger your catastrophic benefit, versus 
the chairman's bill, which uses basically out of pocket, which 
will inevitably lead to private sector employers leaving the 
system and no longer providing that prescription drug benefit.
    CBO says that that can be as high as 32 percent. The 
response by Nancy Johnson today was, no, we are going to 
overcome that 32 percent withdrawal of the private sector from 
this prescription drug benefit by subsidizing the private 
sector companies.
    Well, so what we are doing here is we are basically using 
taxpayer monies to subsidize private sector companies to try to 
keep them in, to provide a benefit, which we think they should 
be doing on their own. Again, I think this is a very convoluted 
approach. And why would we be designing a prescription drug 
benefit that would sacrifice private sector dollars for 
taxpayer dollars and provide a prescription drug benefit?
    And my last point that I will make before I turn to Mr. 
Cooper, goes to the point that Mr. Sessions made time and time 
again, is that another benefit of our bill is when you 
integrate the drug benefit into Medicare Part B, you are 
ensuring that you are not going to have a degree of adverse 
election that you are going to have on the stand-alone 
insurance-only proposal.
    Because, when you acknowledge that we have some tremendous 
advantage in drugs, which I acknowledge and I am very 
supportive of, is that those drugs may be very expensive. But 
if it is a stand-alone drug policy, that premium could quite 
likely escalate, because of costs of those drugs, and yet you 
get no consideration of the savings in your inpatient and your 
outpatient that might be generated.
    And we have a structural flaw in the underlying bill that 
our measure overcomes because of the integration into the 
Medicare Part B. And that is why I think we ought to allow this 
bill to be considered as a substitute on the floor.
    The Chairman. Thank you very much.
    Mr. Cooper.
    Mr. Cooper. I just want to support Cal Dooley's bill. And 
having lived through Clinton health reform, and catastrophic 
health reform, as I think only one or two members of this 
committee have also done, I think it is very important that we 
learn those lessons.
    Doc Hastings mentioned earlier that those who do not learn 
from the lessons of history are doomed to repeat them. I know 
no one on this panel and no one in this Congress wants to 
repeat those lessons. I fear that we are dangerously close.
    For example, the Clinton health plan was not bipartisan. 
Nor is the bill we are likely to put on the floor--there might 
be a sprinkling, but this is not a genuine bipartisan bill. The 
Clinton bill was way too complicated. Our colleagues on the 
other side of the aisle made great hay by showing us postcards 
and stuff like that.
    This bill is also very hard to diagram, even if you use 
fine print. But there is another clincher, which is asking 
seniors to pay even amounts like $35 a month, when they can't 
see a clear benefit. When they can see for example, the first 
half of the donut is really only in the bill, to overcome the 
terrific adverse selection problem that is set up.
    So within the same CBO budget scores, in fact less $367 
billion Dooley and his team have come up with a bill that is 
beautiful and simplistic, fair to seniors, and remarkably 
efficient in the way it spends taxpayer dollars.
    I think I have been as bipartisan as anybody in this 
Congress on health care issues in particular. And I could have 
supported pretty much any bill. But I wanted to find the best 
one. And Cal has got the best one. So I hope this committee has 
the courage to let the House vote its will on a measure like 
this, to let the American people see what you can do within the 
same budget window. It is a bill that seniors are going to 
prefer dramatically over what you are considering, and I think 
this House should have a chance to work its will.
    Read the Washington Post editorial. I am not the biggest 
fan of the Post in the world. They are not the only folks who 
supported this bill. But now it is yesterday's paper, this 
hearing has gone on so long. That will show you at least some 
objective observers, looking at the debate right now. And I 
mean, they have a chance to pick out a bill that makes sense, 
and they are picking the Dooley bill.
    So give it a chance. There are a couple of technical things 
we can get into. Some people shy away from the $4,000 number. 
That is total drug costs, that is not out of pocket.
    75 percent of seniors already have some sort of drug help 
already. It probably means for most seniors in terms of out-of-
pocket expenditures, 2- or $3,000 they are going to be able to 
benefit from this bill, plus the 200 percent poverty provision. 
It is really a remarkably efficient use of government dollars.
    So I urge to you make it in order, as a substitute.
    The Chairman. Thank you very much, Mr. Cooper. Let's go to 
Mr. Larson and then Mr. Sanders.
    Mr. Larson. Thank you very much, Mr. Chairman, Mr. Frost, 
and members of the committee. First just an observation. I have 
been in Congress for 5 years. I agree with much that has been 
said by the members of this committee earlier this evening, 
that this is perhaps the most important piece of legislation 
that we are going to vote on.
    And so it is with a profound and deep sense of respect that 
all of us take this issue so seriously. For 5 years--I have 
been in Congress for 5 years, I have gone back to my district 
and spoken to seniors. I can't tell you how difficult it is to 
tell them that this is a piece of legislation that will take 
effect 3 years from now. That is extraordinarily disheartening. 
But even more so, is the fact, and the reason that I am here, 
and I respect all of the commitments that you have.
    But, the reason that I am here at this hour is because I 
know realistically I am not going to get a chance in this 
Congress to speak on an issue that I care so deeply about, and 
have been addressing the citizens of my district for the past 5 
years. That is the reality.
    That is why I am hopeful, though I am a realist, that so 
much of this debate that we have heard in this committee this 
evening for those of us that aren't on Commerce or Energy or 
Ways and Means, we care and feel as strongly about senior 
citizens as you do here on the Rules Committee for them.
    And as a person who cares deeply about this institution, 
what is hurt here the most, aside from seniors from my 
perspective, is the institution. And the other body, as Mr. 
McGovern has seen fit to have far longer debate, I understand 
the realities of what we have to deal with here in the 
committee.
    But do I think with so many intelligent and thoughtful 
proposals they ought to be made in order so that we can debate 
them? Very simply, I would also like to compliment a dear 
friend and colleague, Nancy Johnson. I think that her energy, 
her temerity, her conscientious manner in which she has 
approached this issue, certainly her good intentions have 
always been there.
    I disagree with the approach and associate myself with the 
comments that Mr. Dooley made in terms of this whole issue of 
subsidies that the doctors also addressed. I say it from a 
sense of conviction, that as I know all members on the Rules 
Committee, and here that come before this body do, I come from 
Hartford, the insurance capital of the world. I know a little 
bit about actuarial assumptions. I know a little bit about 
adverse selection.
    I know a little bit about the reality of making a profit 
important to any business, and the scarcity of a chance that 
that has under this proposal. And how do we, for God's sake, go 
back and explain that to our seniors? In the meantime, what we 
are doing, as the doctors have said, are forcing them to 
subsidize not only the private plans, the ones that the Federal 
employees have, but the rest of the free world.
    My proposal is very straightforward. And I say this with 
respect to all plans. Cost is the issue. If you don't go in and 
have the full faith and credit and leverage of the Federal 
Government, and all of its agencies, and whether it is the VA 
or whether it is the DOD or whether it is HHS, without that 
leverage, there can be no cost control. Because, the program 
just is unfeasible in terms of its profitability for people to 
underwrite in an affordable manner.
    Ronald Reagan said: Facts are a stubborn thing. This is a 
stubborn, stubborn, thorny issue. But by telling people that it 
will take place in 2006 and bursting another bubble in front of 
the seniors, while they continue to subsidize the rest of the 
world, is a wrong-headed approach. That is why I offer this 
amendment and I thank you.
    The Chairman. Thank you.
    Mr. Sanders, thank you for being here. I know you are here 
on a different amendment.
    Mr. Sanders. I don't usually get to work this early. I 
think that the evidence is clear, and all due respect, that the 
proposals that you are offering is a weak proposal in terms of 
methods. The reality is that if I am a senior citizen, and I 
spend $1,000, or I have $1,000 worth of prescription drug 
needs, I am going to end up paying $807 out of my own pocket. 
It is very hard for you to go back in your district and say to 
your constituents that this a serious proposal. We pay 17 
percent, 13 percent I am sorry. And I pay 87 percent. That is a 
weak proposal. It doesn't get much better as we spend $5,000.
    Now, why is it a weak proposal? Are you mean guys? No, I 
don't think that. It is a weak proposal because you don't have 
cost containment in your proposition. And if the government is 
going to pay the highest prices in the world for prescription 
drugs, and you want to only spend $400 billion you ain't going 
to get much. That is the reality. So your proposal is flawed 
significantly because you are not standing up to the 
pharmaceutical industry, and are you continuing to pay the 
highest prices in the world for prescription drugs.
    And the bottom line is, and I think we should be honest, 
and let me put this on the record. The pharmaceutical industry 
is the most powerful industry in the world. They are spending 
$150 million this year, just the industry, not to mention the 
separate companies, to make sure we do not lower prices. In the 
last few years they have spent hundreds of millions of dollars 
and they are succeeding. We should be honest about that.
    Now, what should we be doing? What should we be doing? 
Well, it seems to me, and I was--I have to tell you the very 
first Member of the United States Congress to go across the 
Canadian border. I did that 4 years ago. And people who were 
with me, women bought Tamoxifen, the breast cancer drug, for 
one-tenth of the price. And let me tell you, let's not 
demagogue the Canadian Government. They are doing the right 
thing. They are doing the right thing by negotiating with the 
drug companies. Their prices are not the lowest in the world, 
as you know, in Europe they are lower. Every other country in 
the world's government is standing up to the industry except 
ours.
    When people come before you and say the problem is the rest 
of the world, not us, I think we have got it backwards. It is 
us, not the rest of the world. They are doing the right thing, 
we are doing the wrong thing. So what should we do? I have two 
amendments. The first one is a very comprehensive amendment, 
and interestingly enough, you have heard components of it all 
evening long. If we are going to talk about cost containment, 
let's do three things then I will tell you what you get.
    First of all, I am not going to spend any more money than 
you are. I am going to spend 400 billion. You are spending 400 
billion. This is what I get compared to what you get. I get 
premiums of $24. I get no deductible. I get an 80/20, and I get 
catastrophic coverage at $2,000.
    And I have very strong protections for senior citizens, 
stronger than yours. And I don't spend any more money than you 
do. Now how do I do that? Am I a magician? No. It is because I 
have cost containment, you don't. What is my cost containment? 
Well, interestingly you have heard it all evening. I combine 
what everybody else has talked about, reimportation.
    The argument that you cannot bring in safe prescription 
drugs from Canada is a total fraud. There is 1 million people 
who are doing it. Do you know how many of them have been sick 
or died? Anyone here know? The answer is zero. We had the FDA 
before our committee. The Canadian Regulatory System is exactly 
similar to us. We had a CRS report done on that.
    You have free trade--you, Dave, are a free trader aren't 
you, right? You get on the floor of the House, you say how 
great free trade is.
    I don't often agree with you. But if you have free trade in 
pork bellies coming over the Canadian border, if you get 
lettuce and tomatoes from Mexico from God knows where, why does 
anyone here think that you cannot bring in regulated safe 
prescription drugs from Canada, a system which has a strong 
regulatory system, the same as ours.
    Nobody with a straight face can make that argument.
    So that is number 1. You do reimportation. Number 2, we do 
what a number of people have talked about. You do exactly what 
the Veterans Administration is doing. You use the clout of the 
Federal Government to negotiate the strong price. And the third 
thing you do, which we have also heard earlier, we are spending 
billions and billions of dollars to go to the NIH that are used 
for research. If we are doing that, then the companies cannot 
just charge outrageous prices. It is called reasonable pricing. 
The taxpayers paid for the development of the product, they 
should get a break on that. I think that is common sense.
    You add those things together, you know what, you have 
lowered the cost of prescription drugs for senior citizens, for 
the government, for the taxpayer. And that is why I can do far 
more than you can do, and spend the same amount of money that 
you can, because I am getting the product a lot cheaper. That 
is what I am doing.
    And, I have to tell you, the pharmaceutical industry 
doesn't contribute very much to me. I have got to be 
honestabout that. They don't. But that is the issue. The issue is that 
we have the guts to stand up to the industry. That is my first 
amendment. That is the major one, that I would ask you to put in order.
    The second one is a more simple one. If you don't want to 
go that far, then do what you played a game with doing. Earlier 
we had the first people from the Commerce Committee talk about 
reimportation, go through the whole reimportation, but then 
buried away in there is this little section called the Cochran 
amendment. It says it has to be approved, the Secretary of HHS 
has got to say that it is safe and can save money.
    The Secretary has already told us publicly he isn't going 
to do it. So all of that language, and you shouldn't play a 
game. If you don't believe in reimportation, don't put it in. 
Gutknecht was right. We should do those things. Like putting it 
in, but you are not really serious about it.
    My second amendment would simply say, limit it to Canada, 
because of the same regulatory system that we do, and not have 
the Secretary have to get the approval. So it is a 
reimportation bill. You do that, and you lower prescription 
drug prices in the country by 30 or 40 percent.
    I will bet you, I will get a better benefit just by doing 
that without one nickel of taxpayers dollars than you get. 
People from Vermont, they get in the car and go across the 
border. They will save more money just going across the border 
than you will in your bill, and it doesn't cost $400 billion 
and it won't cost a penny.
    So those are the two options, be bold, do the whole thing 
or just take the Canadian piece. You will be far better off 
than what you have got.
    The Chairman. Thank you.
    Mr. Sanders. I thank you for your support, Mr. Chairman. I 
know it will be there.
    Mr. Linder. Thank you.
    Mr. Frost. You know, I am struck by a couple of ironies now 
that we are winding down here. The first irony, Mr. Dooley, I 
think you are probably aware of this, that your proposal is 
basically what the President was for originally. I remember, 
you know thinking about it, because I remember when he put it 
in a State of the Union, or somewhere, thinking that, well, it 
is an interesting proposal. I am not personally for it.
    But, I am pretty sure that your proposal is very similar to 
what the President originally proposed, which was to take care 
of people at the bottom by a system of subsidies and to have 
catastrophic at the top. Interesting that you wound up the same 
place that he started at.
    The second irony is that even though we started very late 
tonight, 12:50, this has been one of the best committee 
hearings we have had. We have actually had a very good 
discussion on a very important issue. It is too bad that it was 
at a time when there was virtually no press coverage. I think 
there are two reporters here, maybe a couple of other people. I 
recognize two reporters in the room.
    And these are--this type of meeting should be held at a 
time when it can be covered by the public's representatives, by 
the press. And it wasn't.
    Now, the other part is that clearly your amendment should 
be made in order. It is not going to be. And there are some 
other amendments that clearly should be made in order if you 
were going to have a fair consideration on the floor. These 
amendments might all fail. I mean, the majority, I assume, has 
the votes to pass their bill. I don't understand what they are 
afraid of. Why wouldn't they give you a vote?
    Now, they are going to give Dingell and Rangel a vote, 
because they are not worried about that. They think they can 
beat that. They probably can. But, why won't they give you a 
vote? Why won't they give Mrs. Capps a vote? Why won't they 
give Dr. Burgess and Dr. Gingrey a vote? That is the type of 
rule that ought to come out of this committee, where you have 
serious people with serious proposals. If the majority has 
their act together, they will beat all of those proposals. And 
if they don't, they don't deserve to. I mean you have come up--
a group of members, and Mr. Sanders has a very serious proposal 
that deserves to be voted on.
    And yet we have had this meeting, that has gone on for 3 
hours and none of you who have come up here are going to get 
your amendment in order, except the Dingell-Rangel, and that is 
too bad, because this is such an important piece of legislation 
that the House ought to have the opportunity, just as the 
Senate has done. I am not suggesting this should be on the 
floor for 2 weeks, but there is a way to structure a rule with 
time limits where all of the major proposals can be voted on.
    Now, we are under the airplane imperative. The majority has 
decided that they want to give away Friday. And so they want 
to--they are going to have this go on the floor Thursday, 
today, under a very tight rule. This bill could be on the floor 
for 2 days, Thursday and Friday, and all of you could have a 
vote on your amendments.
    You might all lose. But you should have that right. It is 
unfortunate that the majority will not give you the opportunity 
to present very sensible proposals and to have the House vote 
on those.
    And that was the thing--I am sorry if my remarks were 
overly harsh at the beginning of this proceeding. But that is 
what I was talking about, Mr. Chairman, is there is no reason 
why this House should not have the opportunity to cast votes on 
serious proposals made by serious and thoughtful members on 
this--what may be the single most important piece of 
legislation that this House will consider during this 2 year 
session of Congress.
    The Chairman. Thank you very much.
    Ms. Pryce.
    Ms. Pryce. I have no questions. Thank you.
    The Chairman. Mr. McGovern.
    Mr. McGovern. I want to thank Mr. Dooley and Mr. Cooper and 
Mr. Sanders and Mr. Larson for being here at 4 in the morning, 
because it shows their seriousness and their commitment to this 
issue.
    I want to associate myself with the remarks of our ranking 
member. I think these proposals absolutely should be made in 
order. They should be debated. Even if it takes a week or two, 
how many suspensions have we voted on this week alone? I have 
to believe this is a little bit more important than some of 
these suspensions.
    And, this is an issue that impacts 40 million senior 
citizens. And, quite frankly, it deserves not only to have your 
amendments in order on the floor, but you deserve more than 10 
minutes for this amendment and 5 minutes for that amendment, 
because we should have a debate, a real debate rather than 
screaming soundbites at each other.
    I agree with Mr. Frost, that I thought that the testimony 
by Republicans and Democrats here tonight was very thoughtful 
and very productive. And I also agreed with something Mr. 
Larson said in his opening remarks, that he is not on the 
Energy and Commerce Committee, he is not on the Ways and Means 
Committee, but there were members who were not on the relevant 
committees that nonetheless have an opinion on this issue. 
Every one of us does.
    And, this idea that well, the committees have worked their 
will, and we should all just respect that. We had a defense 
authorization bill that came through this committee. And not 
all of us are on the Armed Services Committee, but the chairman 
of our committee had a very thoughtful amendment that was made 
in order. I agreed with him on it and voted for it, but it was 
brought to the floor. It illustrates the fact that there are 
members who are not on the committees of jurisdiction that do 
have interesting and thoughtful and productive ideas. And, I 
think it is just a shame that we are not going to have that 
kind of thoughtful debate on the floor.
    So I thank you all very much for your comments.
    The Chairman. Mr. Diaz-Balart.
    Mr. Diaz-Balart. I thought the presentations, all of the 
presentations, that were made here were very interesting and 
helpful. I appreciate the hard work.
    The Chairman. Mr. Hastings.
    Mr. Hastings of Florida. Thank you very much, Mr. Chairman. 
Mr. Chairman, I appreciate all of the amendments of our 
colleagues. All of them have studied very carefully and for a 
very long period of time. Mr. Cooper was with us at one point 
and then away, and back once again discussing the same issues. 
And Mr. Dooley has been a continuing leader on this.
    Of course, none of us have the nerve that Bernie Sanders 
has to really do what is right, and none of us have the nerve 
to say what is really needed here, that is universal health 
care notwithstanding all of the ups and downs and back and 
forth and everything that we talk about.
    The reality is, that we are better people than that, and we 
ought to be about that business, Mr. Chairman, I alsowant to 
say to John, I did not know or ask the nature of your child's illness. 
But I am delighted to see you back. And I know that from a personal 
standpoint, like our colleague, Ms. Pryce and others of our colleagues, 
Mr. Sessions, all of us have these complications in our personal lives 
that ought to cause us to want to dramatically do something that would 
be beneficial for all of us.
    I can't imagine what the medical costs may have been for 
the period of time that you were away from here. And when I 
talk frequently, as I do about my mother, I am not talking 
about somebody that is a stranger, I am not talking about 
people who are constituents, I am talking about somebody that 
brought me here on earth, and I pay for, gladly, every inch of 
this mile that we are walking toward her death.
    And I may very well precede her, not being God, but the 
fact of the matter is, it is extremely expensive. And all I 
know is that we are doing things sometimes that are helping 
people that don't need help.
    And we are not doing things that we ought to do to help 
people that do need help. Today, when we pass this measure, or 
Friday, we will not have done what we could have done had we 
just given ourselves the time and attention to undertake to do 
what is necessary.
    With that, Mr. Chairman, I thank our colleagues and I am 
sure that each of them should have the privilege as well as 
every other member to have their measures brought to the floor 
and let the will of the House be worked.
    The Chairman. Thank you very much, Mr. Hastings.
    Mr. Hastings of Washington. No questions.
    Mr. Sessions. Mr. Chairman, I would just agree with my 
colleagues. I think it was a wonderful debate that we had this 
evening. I will tell you that I was personally impressed with, 
I think every single speaker that came up that talked about 
their thoughts and ideas. I think it shows the extreme need for 
us to address this issue.
    And I too would like to single out Nancy Johnson for her 
clear articulation and her vision of ideas about what this 
great Nation has in mind for us, a plan. And I feel like this 
was well worth my time to be here, even at this late time.
    I will not be representing the Rules Committee in the 
morning at the baseball game practice.
    The Chairman. Why not?
    Mr. Sessions. I choose not to. Mostly because we have seen 
what happens with one colleague who stayed up too late and 
misspoke, so I am not going to do that.
    But I think this is worth our time, and thank everyone for 
hanging in on this.
    The Chairman. Thanks. Let me say that the evening is not 
over yet.
    Mr. Reynolds.
    Mr. Reynolds. No questions.
    The Chairman. Thank you very much, gentlemen. We appreciate 
your being here.
    Mr. Dooley. Just ask unanimous consent to insert into the 
record a statement from Ellen Tauscher.
    The Chairman. Without objection, Mrs. Tauscher's statement 
will appear in the record.
    [The prepared statement of Mrs. Tauscher follows:]

Prepared Statement of Hon. Ellen Tauscher, a Representative in Congress 
                      From the State of California

    Thank you Chairman Dreier and Ranking Member Frost for recognizing 
me. I would like to voice my support for the Medicare Prescription Now 
Act to be the substitute to H.R. 1. It is clear that the status quo is 
not working to make prescription drugs affordable for seniors. It is 
also clear that our country's current economic situation does not give 
Congress a lot of options for solving this growing problem. Any 
prescription drug plan needs to be part of Medicare, which seniors like 
and trust.
    Our plan is managed by Medicare. By leveraging the buying power of 
all seniors, our plan allows every single person on Medicare to benefit 
from immediate drug savings, regardless of how many prescriptions they 
are filling a month. Furthermore, Mr. Chairman, our seniors need to be 
protected from catastrophic drug costs. Seniors who have high drug 
costs will be able to access the full benefit sooner because our plan 
focuses on the total cost of the drug--not the discounted price paid 
out-of-pocket. Our plan has an extra safety net for those who really 
need it--people with total drug costs of $4,000 a year.
    Finally, Mr. Chairman, I would like to point out that under our 
bill, companies that currently provide prescription drug coverage to 
their retirees will have the incentive to continue doing so because the 
federal government will assume the risk of drug coverage once 
beneficiaries reach their deductible. We need to be smart and realistic 
about how we provide every American senior with prescription drug 
coverage. Given the current economic situation, our plan is the one 
that provides this coverage and is fiscally achievable.

    The Chairman. Our next witness is the gentleman from 
Florida, Mr. Hastings.
    Mr. Hastings of Florida. Mr. Chairman, I would ask 
unanimous consent to have both statements that I have made 
placed in the record. I won't belabor the matter this evening. 
I do urge that one of my measures is nothing more than a sense 
of Congress that expresses support for Federal and State funded 
in-home care for our Nation's elderly.
    It doesn't impact this bill in any way, all it does is say 
that we ought to have better in-home care establishing 
guidelines, implementing better schooling for the people that 
do it.
    I can't imagine that this couldn't be something that could 
be in order. With that in mind, I ask unanimous consent that I 
ask that the statements on both measures that I have offered be 
placed in the record.
    The Chairman. Without objection.
    [The prepared statements of Mr. Hastings of Florida 
follows:]
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[GRAPHIC] [TIFF OMITTED] 89585A.017

[GRAPHIC] [TIFF OMITTED] 89585A.018

[GRAPHIC] [TIFF OMITTED] 89585A.019

    Mr. Linder. No questions.
    Mr. Frost. Mr. Chairman, are we to the point where we are 
going to be voting shortly?
    The Chairman. We have another witness. We are asking 
questions of Mr. Hastings now.
    Mr. Frost. I will save it to the end.
    Ms. Pryce. No.
    Mr. McGovern. No.
    Mr. Diaz-Balart. No questions.
    Mr. Hastings of Washington. No.
    Mr. Sessions. No.
    Mr. Reynolds. No.
    The Chairman. Thank you very much. Thank you very much. Our 
next witness is the gentleman from Arkansas, Mr. Berry, who 
does not appear to be here. Our next witness is the gentleman 
from Massachusetts, Mr. McGovern.
    Mr. McGovern. Mr. Chairman, I will ask unanimous consent to 
insert my statement in the record since I talked about it in my 
opening statement in support of my amendment.
    [The prepared statement of Mr. McGovern of Massachusetts 
follows:]

Prepared Opening Statement of Hon. James McGovern, a Representative in 
                Congress From the State of Massachusetts

    Mr. Chairman, I will be brief. This bill includes a copayment for 
home health services. My amendment would strike this provision from the 
bill.
    A home health copay will lead to increased costs for seniors, home 
health care agencies and the states. Seniors will have to pay for these 
costs out of pocket, a difficult task for seniors living on a fixed 
income. Agencies will have increased costs due to collection and the 
paperwork necessary to complete collection of the copay. And, finally, 
this will be an unfunded mandate on states as Medicaid begins to pick 
up the costs for home health care patients who can't afford Medicare 
home health services.
    Some groups, like 60-plus and the Seniors Coalition, are labeling 
this a ``sick tax'' on home health beneficiaries. I think this an 
important point. Medicare beneficiaries primarily live on a fixed 
income and a copay, although it may not seem like a lot of money, will 
take away from the limited funds these seniors rely on to live a 
relatively comfortable life.
    Mr. Chairman, this is bad policy, plain and simple and I urge my 
colleagues to support my amendment. I yield back the balance of my 
time.

    The Chairman. Thank you very much. Our next witness is Mr. 
Langevin. He appears not to be here. So that will close the 
hearing portion.
    Mr. Frost, you would like to be recognized.
    Mr. Frost. Mr. Chairman, it is really, and I am 
anticipating a rule that the committee is going to be handing 
out. But I think it is a very sad day. This, as I said a moment 
ago, this may be the single most important vote that any of us 
cast this session. And if we should be so fortunate to be back 
in the majority any time soon, and if I should be so fortunate 
to be here, and to be the chairman of the committee at that 
time, I will not tolerate a major piece of legislation going to 
the floor with this kind of rule, without the House having the 
opportunity to consider major, carefully thought-out 
alternatives.
    I think that this is an enormous disservice to the House.
    The Chairman. Thank you very much, Mr. Frost.
    We will distribute the rule. And the Chair will be in 
receipt of a motion.
    Mr. Linder. Mr. Chairman, I move the committee grant a rule 
providing for the consideration of H.R. 1, the Medicare 
Prescription Drug and Modernization Act of 2003, under a 
modified closed rule, providing 3 hours of debate in the House 
equally divided among and controlled by the chairmen and 
ranking minority members of the Committee on Energy and 
Commerce and the Committee on Ways and Means.
    The rule waives all points of order against consideration 
of H.R. 1. The rule provides for consideration of the amendment 
to H.R. 1 printed in the Rules Committee report accompanying 
the resolution, if offered by Representative Rangel of New York 
or his designee, which shall be considered as read and shall be 
separately debatable for 1 hour, equally divided and controlled 
by the proponent and an opponent. The rule waives all points of 
order against the amendment printed in the report.
    The rule provides one motion to recommit H.R. 1 with or 
without instructions.
    The rule further provides for consideration of H.R. 2596 on 
the legislative day of June 26 or June 27, 2003, under a closed 
rule providing 1 hour of debate in the House on H.R. 2596, 
equally divided and controlled by the chairman and ranking 
minority member of the Committee on Ways and Means. The rule 
waives all points of order against consideration of H.R. 2596. 
The rule provides one motion to recommit H.R. 2596 with or 
without instructions.
    The rule provides that in the engrossment of H.R. 1, the 
clerk shall add the text of H.R. 2596, as passed by the House 
as a new matter at the end of H.R. 1, and then lay H.R. 2596 on 
the table.
    The rule provides that during consideration of H.R. 1 and 
H.R. 2596, notwithstanding the operation of the previous 
question, the Chair may postpone further consideration of 
either bill to a time designated by the Speaker.
    The rule further provides that it shall be in order to 
consider concurrent resolutions providing for adjournment of 
the House and Senate during the month of July.
    Finally, the rule provides that the Committee on 
Appropriations may have until midnight on Thursday, July 3, 
2003, to file a report to accompany a bill making 
appropriations for the Department of Defense for the fiscal 
year ending September 30, 2004, and for other purposes.
    The Chairman. You have heard the motion of the gentleman. 
Let me take a couple of minutes to make some comments myself 
and then provide an explanation of the rule that we are 
proceeding with.
    First of all, many people have commented over the last few 
hours about what a spectacular hearing this was. I observed 
that there have been no recorded votes on the House floor, no 
one has been called off to other meetings, and while I am not 
going to propose that we have our regular meetings begin at 
12:50 and extend until 4:30 in the morning, I will say that I 
think that we have had a great deal of attentiveness on the 
part of the members of the committee and witnesses, and that is 
due to the fact that we haven't had the normal distraction that 
we often experience.
    I also wanted the say that this has been fully covered by 
some of the top reporters on Capitol Hill. And we appreciate 
their forbearance.
    But, let me just comment on this rule. As you can see, we 
have taken both the Medicare Prescription Drug and 
Modernization Act and the Health Savings Affordability Act, and 
we will allow consideration of both of those measures on the 
floor tomorrow as outlined by Mr. Linder.
    We also will be putting in place provisions in this rule 
that will ensure that the House does not have to reconvene 
every 3 days based on the fact that we have yet to complete our 
appropriations work. And we still are working hard on that.
    And as the members know, we will having the rule that will 
be following this one, complete the second appropriation bill 
of the 13. We will have 11 more to work on during the month of 
July. And we hope to have those completed by the August recess. 
We also called for an allowance for the committee on 
appropriations to file their defense appropriations bills, so 
that we will be able to consider that immediately upon our 
return. And we will meet on Monday, July 7th, and that 
provision will be in the rule, it will make an allowance for 
that.
    Are there any amendments to the rule?
    Mr. Frost. Yes, Mr. Chairman. And I would preface that by 
saying that when we were in the majority, we often had very 
lengthy hearings during the daytime. We had no difficulty with 
members having to leave for votes or distractions. We didn't 
have to have a hearing late at night to be able to have a 
hearing without distractions.
    Mr. Chairman, I move that H.R. 1 be considered under an 
open rule.
    The Chairman. You have heard the motion of the gentleman. 
Any discussion? If not the vote occurs on the Frost amendment. 
Those in favor will say aye. Those opposed no. In the opinion 
of the Chair, the noes have it. The noes have it. The motion is 
not agreed to.
    Mr. Frost. Roll call, Mr. Chairman.
    The Chairman. The Clerk will call the roll.
    The Clerk. Mr. Goss.
    [No response.]
    The Clerk. Mr. Linder.
    Mr. Linder. No.
    The Clerk. Ms. Pryce.
    Ms. Pryce. No.
    The Clerk. Mr. Diaz-Balart.
    Mr. Diaz-Balart. No.
    The Clerk. Mr. Hastings of Washington.
    Mr. Hastings of Washington. No.
    The Clerk. Mrs. Myrick.
    [No response.]
    The Clerk. Mr. Sessions.
    Mr. Sessions. No.
    The Clerk. Mr. Reynolds.
    Mr. Reynolds. No.
    The Clerk. Mr. Frost.
    Mr. Frost. Aye.
    The Clerk. Ms. Slaughter.
    [No response.]
    The Clerk. Mr. McGovern.
    Mr. McGovern. Aye.
    The Clerk. Mr. Hastings of Florida.
    Mr. Hastings of Florida. Aye.
    The Clerk. Mr. Chairman.
    The Chairman. No. The Clerk will report the total.
    The Clerk. Three yeas and seven nays.
    The Chairman. The motion is not agreed to. Are there 
further amendments?
    Mr. Frost.
    Mr. Frost. I have an amendment to the rule. I move the 
committee make in order the amendment numbered 52 offered by 
Representative Dooley and ask that the amendment be given the 
appropriate waivers. The amendment offers a prescription drug 
plan with no premiums and universal eligibility. It provides an 
80/20 cost share after total drug costs of $4,000 and enhanced 
benefits for beneficiaries living up to 200 percent of the 
poverty level.
    The amendment encourages continuation of current drug 
coverage based on reimbursement agreements with Medicare. It 
also adds rural provider fixes to address geographic 
inequalities.
    Mr. Chairman, this is a very thoughtful amendment offered 
by a group of Members who have a distinct and different 
approach from that being offered by the majority. I do not know 
if this amendment would pass on the floor, but it is an 
amendment that deserves to be debated on the floor.
    And I would--the reason that I said earlier that this may 
be the most important piece of legislation we will consider 
this session, is that the underlying bill, the majority's bill, 
would dramatically change the Medicare program as your own 
members have acknowledged, including Mrs. Johnson, it just 
doesn't provide prescription drugs, it dramatically changes the 
way that Medicare would operate after 2010.
    It is a monumental piece of legislation. And we are--the 
Members should be entitled to vote on serious alternatives to 
the approaches. I would ask for a roll call.
    The Chairman. You have heard the motion of the gentleman. 
Any discussion? If not the vote occurs on the Frost amendment. 
Those in favor will say aye. Those opposed no. In the opinion 
of the Chair, the noes have it. The noes have it. The motion is 
not agreed to.
    Mr. Frost. Roll call, Mr. Chairman.
    The Chairman. The Clerk will call the roll.
    The Clerk. Mr. Goss.
    [No response.]
    The Clerk. Mr. Linder.
    Mr. Linder. No.
    The Clerk. Ms. Pryce.
    Ms. Pryce. No.
    The Clerk. Mr. Diaz-Balart.
    Mr. Diaz-Balart. No.
    The Clerk. Mr. Hastings of Washington.
    Mr. Hastings of Washington. No.
    The Clerk. Mrs. Myrick.
    [No response.]
    The Clerk. Mr. Sessions.
    Mr. Sessions. No.
    The Clerk. Mr. Reynolds.
    Mr. Reynolds. No.
    The Clerk. Mr. Frost.
    Mr. Frost. Aye.
    The Clerk. Ms. Slaughter.
    [No response.]
    The Clerk. Mr. McGovern.
    Mr. McGovern. Aye.
    The Clerk. Mr. Hastings of Florida.
    Mr. Hastings of Florida. Aye.
    The Clerk. Mr. Chairman.
    The Chairman. No. The Clerk will report the total.
    The Clerk. Three yeas and seven nays.
    The Chairman. The motion is not agreed to. Are there 
further amendments? Mr. Frost.
    Mr. Frost. I have an amendment to the rule. This is the 
Blue Dog substitute. I move that the committee make in order 
the amendment in the nature of a substitute numbered 50 offered 
by Representative Thompson of California, and ask that the 
amendment be given the appropriate waivers. The amendment in 
the nature of a substitute generally incorporates the 
provisions of the bipartisan Medicare bill, that the other body 
is currently debating. It establishes a prescription drug 
benefit in Medicare, delivery through private plans, and 
contains a fallback provision for areas where there are not at 
least two plans available.
    This bill has higher payments for rural health care 
providers than the House bill, and does not include the premium 
support provisions that would privatize Medicare in the year 
2010. This is the bill that is currently being considered by 
the other body.
    The Chairman. You have heard the motion of the gentleman. 
Any discussion?
    Mr. McGovern. I have a question. I guess I am just curious, 
if you can give us an explanation as to why none ofthese 
substitutes or amendments will be made in order?
    The Chairman. I don't know that that is the case.
    Mr. Frost. They are not in your rule.
    The Chairman. Let me explain. What we decided, if I can 
answer your question, thank you very much. What we decided in 
the rule, was as we had discussed for the last several weeks is 
to make a substitute in order, which was my request, that we 
make a substitute in order. And we have made a substitute in 
order, the first substitute that was requested by the 
representatives of the Energy and Commerce Committee who 
testified here.
    The number 1 request from the Democratic representative at 
this table, was that we make in order the substitute that we 
made in order. We made that choice. So, while that was at the 
top of the list, we chose to make in order that amendment.
    Mr. McGovern. Before Mr. Frost responds, I guess that is 
not answering my question, which is why--the question I have is 
when we talked to the Blue Dogs, or if we talk to any of the 
people who you acknowledge were so thoughtful and eloquent 
tonight as to why they were shut out of this process, I am 
wondering is because there is not enough time or because they 
were--their amendments weren't germane or----
    The Chairman. So that you will have an opportunity to 
explain this very clearly, and quote me well on the House floor 
tomorrow, I want to say very clearly: We made a determination 
that we would meet the request of the minority to make a 
substitute in order.
    The first substitute that was requested by the 
representatives of the Energy and Commerce Committee, Mr. 
Brown, who testified, his first request was that we make in 
order the Dingell-Rangel substitute. And that is what I 
perceived it to be.
    So let me just say that, that is what we are going to do. 
We are going to have a number of recorded votes. We are going 
to be here through the evening. I know that we have quite a bit 
of time ahead of us here. I have given my explanation and that 
is the explanation.
    Mr. McGovern. I am going to yield to the gentleman, but let 
me just simply say that I think you are mischaracterizing the 
minority position. There was a letter sent to you signed by Mr. 
Frost and the leader.
    Mr. Frost. The position of the minority was that this be an 
open rule so that all substitutes can be considered. There was 
a letter sent to your leadership, by every one in our 
leadership, and I also signed the letter. It is not the 
position of the Democrats in Congress, it was not the position 
of our leadership, that only one substitute be made in order.
    You have chosen not--the majority has chosen which 
substitute it wanted to make in order. That was not the 
position of the minority. That was not the request of the 
minority. And you have a letter to that effect.
    The Chairman. What was the request of the minority?
    Mr. Frost. I just stated it. That every amendment be made 
in order. That was signed.
    The Chairman. That every substitute amendment be made in 
order? We chose to make a substitute amendment in order. When 
testimony was provided, the lead Democratic witness went 
through the request that you just had. We chose to make one 
substitute in order on this rule. And what we did was we made 
in order the first amendment, substitute amendment that was 
offered by the lead Democratic witness. And I would like to 
have a vote, if you don't mind, on this amendment.
    Mr. Frost. If I may, I would like to submit for the 
record----
    The Chairman. Without objection.
    Mr. Frost [continuing]. The letter signed by Nancy Pelosi, 
Steny Hoyer, Bob Menendez, Jim Clyburn and myself as ranking 
member, asking that all substitutes be made in order.
    [The information follows:]
    [GRAPHIC] [TIFF OMITTED] 89585A.020
    
    [GRAPHIC] [TIFF OMITTED] 89585A.021
    
    The Chairman. I understand that minority would like to have 
an open rule on this, and would like to have every single 
amendment that was proposed.
    Mr. Frost. You are mischaracterizing what the request of 
the minority was. The request of the minority is that all 
substitutes be made in order. You are mischaracterizing----
    The Chairman. I did not say that the minority did not ask 
that all substitutes be made in order. What I said was, that we 
made the determination that we would give the minority an 
opportunity to offer a substitute. The first substitute that 
was mentioned in testimony here by the lead Democratic witness 
was the substitute that we have made in order.
    Mr. Frost. Those were the witnesses from the two committees 
of jurisdiction. Obviously they are going to be the first ones 
to testify. Obviously. That doesn't mean that that was the 
favored position. That doesn't mean----
    The Chairman. Well, actually, Mr. Frost, if I may, that 
lead witness mentioned all of the substitutes. But he began by 
first mentioning the Dingell-Rangel substitute before he said, 
as you just have, that you would like to have the other 
substitutes made in order.
    Mr. Frost. Those two witnesses were there representing Mr. 
Dingell and Mr. Rangel. They were not representing the 
leadership of our party, they were representing the ranking 
members of the two committees of jurisdiction.
    Mr. McGovern. If you go back to the opening statements, it 
began with, we want an open rule.
    The Chairman. I think we have had the vote on that. The 
vote occurs on the motion of the gentleman.
    Those in favor will say aye. Those opposed no. In the 
opinion of the Chair, the noes have it. The noes have it. The 
motion is not agreed to.
    Mr. Frost. Roll call, Mr. Chairman.
    The Chairman. The Clerk will call the roll.
    The Clerk. Mr. Goss.
    [No response.]
    The Clerk. Mr. Linder.
    Mr. Linder. No.
    The Clerk. Ms. Pryce.
    Ms. Pryce. No.
    The Clerk. Mr. Diaz-Balart.
    Mr. Diaz-Balart. No.
    The Clerk. Mr. Hastings of Washington.
    Mr. Hastings of Washington. No.
    The Clerk. Mrs. Myrick.
    [No response.]
    The Clerk. Mr. Sessions.
    Mr. Sessions. No.
    The Clerk. Mr. Reynolds.
    Mr. Reynolds. No.
    The Clerk. Mr. Frost.
    Mr. Frost. Aye.
    The Clerk. Ms. Slaughter.
    [No response.]
    The Clerk. Mr. McGovern.
    Mr. McGovern. Aye.
    The Clerk. Mr. Hastings of Florida.
    Mr. Hastings of Florida. Aye.
    The Clerk. Mr. Chairman.
    The Chairman. No. The Clerk will report the total.
    The Clerk. Three yeas and seven nays.
    The Chairman. The motion is not agreed to. Are there 
further amendments?
    Mr. Frost.
    Mr. Frost. I have an amendment to the rule. I move the 
committee make in order the amendment number 1 offered by 
Representative Sanders and ask that the amendment be given the 
appropriate waivers. The amendment replaces Title 1 of the bill 
with a Medicare prescription drug benefit structured like 
Medicare Part B, with a defined premium and a strong benefit.
    It also allows the reimportation of drugs from Canada, 
eliminates price discrimination against seniors and sunsets the 
program when its expenditures reach $400 billion.
    The Chairman. You have heard the motion of the gentleman. 
Any discussion? If not the vote occurs on the Frost amendment. 
Those in favor will say aye. Those opposed no. In the opinion 
of the Chair the noes have it. The noes have it. The motion is 
not agreed to.
    Mr. Frost. Roll call, Mr. Chairman.
    The Chairman. The Clerk will call the roll.
    The Clerk. Mr. Goss.
    [No response.]
    The Clerk. Mr. Linder.
    Mr. Linder. No.
    The Clerk. Ms. Pryce.
    Ms. Pryce. No.
    The Clerk. Mr. Diaz-Balart.
    Mr. Diaz-Balart. No.
    The Clerk. Mr. Hastings of Washington.
    Mr. Hastings of Washington. No.
    The Clerk. Mrs. Myrick.
    [No response.]
    The Clerk. Mr. Sessions.
    Mr. Sessions. No.
    The Clerk. Mr. Reynolds.
    Mr. Reynolds. No.
    The Clerk. Mr. Frost.
    Mr. Frost. Aye.
    The Clerk. Ms. Slaughter.
    [No response.]
    The Clerk. Mr. McGovern.
    Mr. McGovern. Aye.
    The Clerk. Mr. Hastings of Florida.
    Mr. Hastings of Florida. Aye.
    The Clerk. Mr. Chairman.
    The Chairman. No. The Clerk will report the total.
    The Clerk. Three yeas and seven nays.
    The Chairman. The motion is not agreed to. Are there 
further amendments?
    Mr. Frost.
    Mr. Frost. Mr. Chairman, I have an amendment to the rule. I 
move the committee make in order the amendment number 49 
offered by four Republican Members, Representatives Buyer, 
Norwood, Burr, and Shadegg, and ask that the amendment be given 
the appropriate waivers.
    The amendment replaces the Title 1 drug benefit of the bill 
with a discount drug card program.
    The Chairman. You have heard the motion of the gentleman. 
Any discussion? If not the vote occurs on the Frost amendment. 
Those in favor will say aye. Those opposed no. In the opinion 
of the Chair, the noes have it. The noes have it. The motion is 
not agreed to.
    The Frost. Roll call, Mr. Chairman.
    The Chairman. The Clerk will call the roll.
    The Clerk. Mr. Goss.
    [No response.]
    The Clerk. Mr. Linder.
    Mr. Linder. No.
    The Clerk. Ms. Pryce.
    Ms. Pryce. No.
    The Clerk. Mr. Diaz-Balart.
    Mr. Diaz-Balart. No.
    The Clerk. Mr. Hastings of Washington.
    Mr. Hastings of Washington. No.
    The Clerk. Mrs. Myrick.
    [No response.]
    The Clerk. Mr. Sessions.
    Mr. Sessions. No.
    The Clerk. Mr. Reynolds.
    Mr. Reynolds. No.
    The Clerk. Mr. Frost.
    Mr. Frost. Aye.
    The Clerk. Ms. Slaughter.
    [No response.]
    The Clerk. Mr. McGovern.
    Mr. McGovern. Aye.
    The Clerk. Mr. Hastings of Florida.
    Mr. Hastings of Florida. Aye.
    The Clerk. Mr. Chairman.
    The Chairman. No. The Clerk will report the total.
    The Clerk. Three yeas and seven nays.
    The Chairman. The motion is not agreed to. Are there 
further amendments?
    Mr. Frost.
    Mr. Frost. Mr. Chairman. I have an amendment to the rule. I 
move the committee make in order the amendment numbered 59 
offered by Representatives Capps and Norwood, and ask that the 
amendment be given the appropriate waivers. The amendment 
corrects the overpayments for oncology drugs that goes on 
today, but increases the compensation oncologists receive for 
their services.
    It also allows a more accurate payment for oncology drugs 
which by replacing the average wholesale price with the average 
sales price. It also would pay physicians for the additional 
work they perform before and after patient visits and 
consultations.
    I would add, Mr. Chairman, that, as you know, I have some 
personal experience in this area. Over the last year, my wife 
was operated on for breast cancer and was treated by the 
oncology department on an outpatient basis at Southwestern 
Medical Center in Dallas, Texas. She received excellent care. 
And I know that a Member on your side who is not here tonight, 
Mrs. Myrick, also has the same situation.
    And I am aware that other members of this committee have 
had members of their family or close associates who have also 
received this type of treatment.
    Mr. Chairman, I think this is an eminently reasonable 
amendment. And I think it would be very unfortunate if this 
amendment is not made in order.
    Mr. Linder. Mr. Chairman, I believe that is in the bill. 
The average wholesale price in the bill has been taken out if 
you go to a lower actual price and a higher reimbursement fee 
for oncology.
    Mr. Frost. Several parts of this amendment. I do not 
believe the entire amendment is.
    Mr. Linder. Okay.
    Mr. Frost. And, Mr. Chairman, I would ask for a vote.
    The Chairman. The vote occurs on the motion of the 
gentleman. You have heard the motion of the gentleman. Any 
discussion? If not the vote occurs on the Frost amendment. 
Those in favor will say aye. Those opposed no. In the opinion 
of the Chair, the noes have it. The noes have it. The motion is 
not agreed to.
    Mr. Frost. Roll call, Mr. Chairman.
    The Chairman. The Clerk will call the roll.
    The Clerk. Mr. Goss.
    [No response.]
    The Clerk. Mr. Linder.
    Mr. Linder. No.
    The Clerk. Ms. Pryce.
    Ms. Pryce. No.
    The Clerk. Mr. Diaz-Balart.
    Mr. Diaz-Balart. No.
    The Clerk. Mr. Hastings of Washington.
    Mr. Hastings of Washington. No.
    The Clerk. Mrs. Myrick.
    [No response.]
    The Clerk. Mr. Sessions.
    Mr. Sessions. No.
    The Clerk. Mr. Reynolds.
    Mr. Reynolds. No.
    The Clerk. Mr. Frost.
    Mr. Frost. Aye.
    The Clerk. Ms. Slaughter.
    [No response.]
    The Clerk. Mr. McGovern.
    Mr. McGovern. Aye.
    The Clerk. Mr. Hastings of Florida.
    Mr. Hastings of Florida. Aye.
    The Clerk. Mr. Chairman.
    The Chairman. No. The Clerk will report the total.
    The Clerk. Three yeas and seven nays.
    The Chairman. The motion is not agreed to. Are there 
further amendments?
    Mr. McGovern.
    Mr. McGovern. I have an amendment to the rule. I move the 
committee make in order amendment number 41 offered by 
Representative Strickland and ask that the amendment be given 
the appropriate waivers.
    The amendment guarantees that all Medicare beneficiaries 
participating in the bill's new prescription drug programs will 
pay a $35 premium in 2006, the first year of the program.
    The Chairman. You have heard the motion of the gentleman. 
Any discussion? If not the vote occurs on the McGovern 
amendment. Those in favor will say aye. Those opposed no. In 
the opinion of the Chair the noes have it.
    The noes have it. The motion is not agreed to.
    Mr. Frost. Roll call, Mr. Chairman.
    The Chairman. The Clerk will call the roll.
    The Clerk. Mr. Goss.
    [No response.]
    The Clerk. Mr. Linder.
    Mr. Linder. No.
    The Clerk. Ms. Pryce.
    Ms. Pryce. No.
    The Clerk. Mr. Diaz-Balart.
    Mr. Diaz-Balart. No.
    The Clerk. Mr. Hastings of Washington.
    Mr. Hastings of Washington. No.
    The Clerk. Mrs. Myrick.
    [No response.]
    The Clerk. Mr. Sessions.
    Mr. Sessions. No.
    The Clerk. Mr. Reynolds.
    Mr. Reynolds. No.
    The Clerk. Mr. Frost.
    Mr. Frost. Aye.
    The Clerk. Ms. Slaughter.
    [No response.]
    The Clerk. Mr. McGovern.
    Mr. McGovern. Aye.
    The Clerk. Mr. Hastings of Florida.
    Mr. Hastings of Florida. Aye.
    The Clerk. Mr. Chairman.
    The Chairman. No. The Clerk will report the total.
    The Clerk. Three yeas and seven nays.
    The Chairman. The motion is not agreed to. Are there 
further amendments?
    Mr. McGovern.
    Mr. McGovern. Mr. Chairman, I have an amendment to the 
rule. I move the committee make in order the amendment number 
18 offered by Representatives McGovern and ask that the 
amendment be given the appropriate waivers. The amendment 
eliminates the bill's home health care copayment.
    The Chairman. You have heard the motion of the gentleman. 
Any discussion? If not the vote occurs on the McGovern 
amendment. Those in favor will say aye. Those opposed no. In 
the opinion of the Chair, the noes have it. The noes have it. 
The motion is not agreed to.
    Mr. Frost. Roll call, Mr. Chairman.
    The Chairman. The Clerk will call the roll.
    The Clerk. Mr. Goss.
    [No response.]
    The Clerk. Mr. Linder.
    Mr. Linder. No.
    The Clerk. Ms. Pryce.
    Ms. Pryce. No.
    The Clerk. Mr. Diaz-Balart.
    Mr. Diaz-Balart. No.
    The Clerk. Mr. Hastings of Washington.
    Mr. Hastings of Washington. No.
    The Clerk. Mrs. Myrick.
    [No response.]
    The Clerk. Mr. Sessions.
    Mr. Sessions. No.
    The Clerk. Mr. Reynolds.
    Mr. Reynolds. No.
    The Clerk. Mr. Frost.
    Mr. Frost. Aye.
    The Clerk. Ms. Slaughter.
    [No response.]
    The Clerk. Mr. McGovern.
    Mr. McGovern. Aye.
    The Clerk. Mr. Hastings of Florida.
    Mr. Hastings of Florida. Aye.
    The Clerk. Mr. Chairman.
    The Chairman. No. The Clerk will report the total.
    The Clerk. Three yeas and seven nays.
    The Chairman. The motion is not agreed to. Are there 
further amendments?
    Mr. McGovern.
    Mr. McGovern. I have an amendment to the rule. I move that 
the committee make in order the amendment numbered 48 offered 
by Representatives Emanuel and Gutknecht and ask that the 
amendment be given the appropriate waivers.
    The amendment closes loopholes that brand name drug 
companies use to block generic drugs from coming into the 
market. It utilizes the principles of the free market by giving 
Americans access to FDA approved drugs from other 
industrialized nations and provides for a return for government 
sponsored pharmaceutical research.
    The Chairman. You have heard the motion of the gentleman. 
Any discussion? If not the vote occurs on the McGovern 
amendment. Those in favor will say aye. Those opposed no. In 
the opinion of the Chair, the noes have it. The noes have it. 
The motion is not agreed to.
    Mr. Frost. Roll call, Mr. Chairman.
    The Chairman. The Clerk will call the roll.
    The Clerk. Mr. Goss.
    [No response.]
    The Clerk. Mr. Linder.
    Mr. Linder. No.
    The Clerk. Ms. Pryce.
    Ms. Pryce. No.
    The Clerk. Mr. Diaz-Balart.
    Mr. Diaz-Balart. No.
    The Clerk. Mr. Hastings of Washington.
    Mr. Hastings of Washington. No.
    The Clerk. Mrs. Myrick.
    [No response.]
    The Clerk. Mr. Sessions.
    Mr. Sessions. No.
    The Clerk. Mr. Reynolds.
    Mr. Reynolds. No.
    The Clerk. Mr. Frost.
    Mr. Frost. Aye.
    The Clerk. Ms. Slaughter.
    [No response.]
    The Clerk. Mr. McGovern.
    Mr. McGovern. Aye.
    The Clerk. Mr. Hastings of Florida.
    Mr. Hastings of Florida. Aye.
    The Clerk. Mr. Chairman.
    The Chairman. No. The Clerk will report the total.
    The Clerk. Three yeas and seven nays.
    The Chairman. The motion is not agreed to. Are there 
further amendments?
    Mr. McGovern.
    Mr. McGovern. I have an amendment to the rule. I move that 
the committee make in order amendment 20 offered by 
Representative Cardin and ask that the amendment be given the 
appropriate waivers.
    The amendment directs the Secretary to offer a prescription 
drug plan with standard coverage throughout the United States 
and areas not served by private prescription drug plan 
sponsors.
    The Chairman. You have heard the motion of the gentleman. 
Any discussion? If not the vote occurs on the McGovern 
amendment. Those in favor will say aye. Those opposed no. In 
the opinion of the Chair, the noes have it. The noes have it. 
The motion is not agreed to.
    Mr. Frost. Roll call, Mr. Chairman.
    The Chairman. The Clerk will call the roll.
    The Clerk. Mr. Goss.
    [No response.]
    The Clerk. Mr. Linder.
    Mr. Linder. No.
    The Clerk. Ms. Pryce.
    Ms. Pryce. No.
    The Clerk. Mr. Diaz-Balart.
    Mr. Diaz-Balart. No.
    The Clerk. Mr. Hastings of Washington.
    Mr. Hastings of Washington. No.
    The Clerk. Mrs. Myrick.
    [No response.]
    The Clerk. Mr. Sessions.
    Mr. Sessions. No.
    The Clerk. Mr. Reynolds.
    Mr. Reynolds. No.
    The Clerk. Mr. Frost.
    Mr. Frost. Aye.
    The Clerk. Ms. Slaughter.
    [No response.]
    The Clerk. Mr. McGovern.
    Mr. McGovern. Aye.
    The Clerk. Mr. Hastings of Florida.
    Mr. Hastings of Florida. Aye.
    The Clerk. Mr. Chairman.
    The Chairman. No. The Clerk will report the total.
    The Clerk. Three yeas and seven nays.
    The Chairman. The motion is not agreed to.
    Are there further amendments?
    Mr. McGovern.
    Mr. McGovern. I have an amendment to the rule. I move that 
the committee make in order the amendment numbered 10 offered 
by Representatives Sandlin and Green of Texas and ask that the 
amendment be given the appropriate waivers.
    The amendment would eliminate the bill's so-called doughnut 
hole by extending 20 percent cost-sharing up to the 
beneficiary's annual out of pocket threshold.
    The Chairman. You have heard the motion of the gentleman. 
Any discussion? If not the vote occurs on the McGovern 
amendment. Those in favor will say aye. Those opposed no. In 
the opinion of the Chair the noes have it. The noes have it. 
The motion is not agreed to.
    Mr. Frost. Roll call, Mr. Chairman.
    The Chairman. The Clerk will call the roll.
    The Clerk. Mr. Goss.
    [No response.]
    The Clerk. Mr. Linder.
    Mr. Linder. No.
    The Clerk. Ms. Pryce.
    Ms. Pryce. No.
    The Clerk. Mr. Diaz-Balart.
    Mr. Diaz-Balart. No.
    The Clerk. Mr. Hastings of Washington.
    Mr. Hastings of Washington. No.
    The Clerk. Mrs. Myrick.
    [No response.]
    The Clerk. Mr. Sessions.
    Mr. Sessions. No.
    The Clerk. Mr. Reynolds.
    Mr. Reynolds. No.
    The Clerk. Mr. Frost.
    Mr. Frost. Aye.
    The Clerk. Ms. Slaughter.
    [No response.]
    The Clerk. Mr. McGovern.
    Mr. McGovern. Aye.
    The Clerk. Mr. Hastings of Florida.
    Mr. Hastings of Florida. Aye.
    The Clerk. Mr. Chairman.
    The Chairman. No. The Clerk will report the total.
    The Clerk. Three yeas and seven nays.
    The Chairman. The motion is not agreed to. Are there 
further amendments?
    Mr. McGovern.
    Mr. McGovern. Mr. Chairman, I have an amendment to the 
rule. I move that the committee make in order the amendment 
number 30 offered by Representative Kaptur and ask that the 
amendment be given the appropriate waivers. The amendment would 
strike language in H.R. 1 that prohibits the Secretary from 
negotiating prices of prescription drugs, and requires the 
Secretary to participate in price negotiations such as the 
Secretary of Veterans Affairs does under the Federal Supply 
Schedule.
    The Chairman. You have heard the motion of the gentleman. 
Any discussion? If not the vote occurs on the McGovern 
amendment. Those in favor will say aye. Those opposed no. In 
the opinion of the Chair the noes have it. The noes have it. 
The motion is not agreed to.
    Mr. Frost. Roll call, Mr. Chairman.
    The Chairman. The Clerk will call the roll.
    The Clerk. Mr. Goss.
    [No response.]
    The Clerk. Mr. Linder.
    Mr. Linder. No.
    The Clerk. Ms. Pryce.
    Ms. Pryce. No.
    The Clerk. Mr. Diaz-Balart.
    Mr. Diaz-Balart. No.
    The Clerk. Mr. Hastings of Washington.
    Mr. Hastings of Washington. No.
    The Clerk. Mrs. Myrick.
    [No response.]
    The Clerk. Mr. Sessions.
    Mr. Sessions. No.
    The Clerk. Mr. Reynolds.
    Mr. Reynolds. No.
    The Clerk. Mr. Frost.
    Mr. Frost. Aye.
    The Clerk. Ms. Slaughter.
    [No response.]
    The Clerk. Mr. McGovern.
    Mr. McGovern. Aye.
    The Clerk. Mr. Hastings of Florida.
    Mr. Hastings of Florida. Aye.
    The Clerk. Mr. Chairman.
    The Chairman. No. The Clerk will report the total.
    The Clerk. Three yeas and seven nays.
    The Chairman. The motion is not agreed to. Are there 
further amendments?
    Mr. McGovern.
    Mr. McGovern. I have an amendment to the rule. I move that 
the committee make in order amendment number 2 offered by 
Representative Sanders. I ask that the amendment be given the 
appropriate waivers.
    The amendment includes a Canada-only reimportation 
provision allowing Americans to benefit from international 
price competition.
    The Chairman. You have heard the motion of the gentleman. 
Any discussion? If not, the vote occurs on the Frost amendment. 
Those in favor will say aye. Those opposed no. In the opinion 
of the Chair, the noes have it.
    The noes have it. The motion is not agreed to.
    Mr. Frost. Roll call, Mr. Chairman.
    The Chairman. The Clerk will call the roll.
    The Clerk. Mr. Goss.
    [No response.]
    The Clerk. Mr. Linder.
    Mr. Linder. No.
    The Clerk. Ms. Pryce.
    Ms. Pryce. No.
    The Clerk. Mr. Diaz-Balart.
    Mr. Diaz-Balart. No.
    The Clerk. Mr. Hastings of Washington.
    Mr. Hastings of Washington. No.
    The Clerk. Mrs. Myrick.
    [No response.]
    The Clerk. Mr. Sessions.
    Mr. Sessions. No.
    The Clerk. Mr. Reynolds.
    Mr. Reynolds. No.
    The Clerk. Mr. Frost.
    Mr. Frost. Aye.
    The Clerk. Ms. Slaughter.
    [No response.]
    The Clerk. Mr. McGovern.
    Mr. McGovern. Aye.
    The Clerk. Mr. Hastings of Florida.
    Mr. Hastings of Florida. Aye.
    The Clerk. Mr. Chairman.
    The Chairman. No. The Clerk will report the total.
    The Clerk. Three yeas and seven nays.
    The Chairman. The motion is not agreed to. Are there 
further amendments?
    Mr. McGovern, further amendments?
    Mr. McGovern. I have an amendment to the rule. I move that 
the committee make in order the amendment offered by 
Representative Brown of Ohio and ask that the amendment be 
given the appropriate waivers.
    The amendment revises the certification provision in the 
drug reimportation section of the bill to require the Secretary 
to provide defensible reasons for blocking its implementation 
to ensure that the Secretary takes into account the risks 
associated with failing to address the price discrimination 
against American consumers.
    The Chairman. You have heard the motion of the gentleman. 
Any discussion? If not the vote occurs on the McGovern 
amendment. Those in favor will say aye. Those opposed no. In 
the opinion of the Chair the noes have it. The noes have it. 
The motion is not agreed to.
    Mr. Frost. Roll call, Mr. Chairman.
    The Chairman. The Clerk will call the roll.
    The Clerk. Mr. Goss.
    [No response.]
    The Clerk. Mr. Linder.
    Mr. Linder. No.
    The Clerk. Ms. Pryce.
    Ms. Pryce. No.
    The Clerk. Mr. Diaz-Balart.
    Mr. Diaz-Balart. No.
    The Clerk. Mr. Hastings of Washington.
    Mr. Hastings of Washington. No.
    The Clerk. Mrs. Myrick.
    [No response.]
    The Clerk. Mr. Sessions.
    Mr. Sessions. No.
    The Clerk. Mr. Reynolds.
    Mr. Reynolds. No.
    The Clerk. Mr. Frost.
    Mr. Frost. Aye.
    The Clerk. Ms. Slaughter.
    [No response.]
    The Clerk. Mr. McGovern.
    Mr. McGovern. Aye.
    The Clerk. Mr. Hastings of Florida.
    Mr. Hastings of Florida. Aye.
    The Clerk. Mr. Chairman.
    The Chairman. No. The Clerk will report the total.
    The Clerk. Three yeas and seven nays.
    The Chairman. Are there further amendments?
    Mr. McGovern.
    Mr. McGovern. Mr. Chairman, I have an en bloc amendment. I 
move that the committee make in order amendment number 13 
offered by Representative Brown of Ohio, number 8 offered by 
Representative Pallone, number 34 offered by Representative 
John, number 33 offered by Representative John, number 32 
offered by Representative Green, number 29 offered by 
Representative Langevin, number 22 offered by Representatives 
Berry and Emerson, number 27 offered by Representative Capps, 
and an additional one offered by Representative Brown of Ohio.
    The Chairman. You heard the motion of the gentleman. Any 
discussion?
    Mr. Hastings of Florida. Yes, Mr. Chairman.
    The Chairman. Mr. Hastings.
    Mr. Hastings of Florida. Mr. Chairman, I would like to ask 
you or Mr. McGovern whether or not Mr. Frost earlier offered an 
amendment on Dr. Burgess and----
    Mr. Frost. No, I did not offer Dr. Burgess.
    Mr. Hastings of Florida. Then, if it is permissible, I 
would offer an amendment to the en bloc.
    The Chairman. If Mr. McGovern will agree to offer that.
    Mr. McGovern. I am happy to.
    The Chairman. The Burgess-Gingrey amendment will be 
included in the en bloc.
    Mr. McGovern. I think they had two apiece.
    Mr. Hastings of Florida. Three and four.
    Mr. McGovern. Gingrey had two others.
    The Chairman. For the Clerk and all----
    Mr. McGovern. Why don't I do this now and offer them 
separately?
    The Chairman. The vote occurs on the en bloc amendment of 
the gentleman from Massachusetts Mr. McGovern. Those in favor 
will say aye. Those opposed, no.
    In the opinion of the Chair, the noes have it.
    Mr. McGovern. I ask for a roll call.
    The Chairman. The Clerk will call the roll.
    The Clerk. Mr. Goss.
    [No response.]
    The Clerk. Mr. Linder.
    Mr. Linder. No.
    The Clerk. Ms. Pryce.
    Ms. Pryce. No.
    The Clerk. Mr. Diaz-Balart.
    Mr. Diaz-Balart. No.
    The Clerk. Mr. Hastings of Washington.
    Mr. Hastings of Washington. No.
    The Clerk. Mrs. Myrick.
    [No response.]
    The Clerk. Mr. Sessions.
    Mr. Sessions. No.
    The Clerk. Mr. Reynolds.
    Mr. Reynolds. No.
    The Clerk. Mr. Frost.
    Mr. Frost. Aye.
    The Clerk. Mrs. Slaughter.
    [No response.]
    The Clerk. Mr. McGovern.
    Mr. McGovern. Aye.
    The Clerk. Mr. Hastings of Florida.
    Mr. Hastings of Florida. Aye.
    The Clerk. Mr. Chairman.
    The Chairman. No. And the Clerk will report the total.
    The Clerk. Three yeas; seven nays.
    The Chairman. And the motion is not agreed to.
    Would you like to----
    Mr. McGovern. Mr. Chairman, I have an amendment to the 
rule; and I move the committee make in order en bloc the 
following amendments and ask that the amendments be given the 
appropriate waivers: Burgess numbers 3 and 4 and Gingrey number 
25 and number 26.
    The Chairman. You heard the motion of the gentleman. Any 
discussion?
    If not, the vote occurs on the McGovern amendment. Those in 
favor will say aye. Those opposed, no.
    Mr. McGovern. I ask for a roll call.
    The Chairman. The Clerk will call the roll.
    The Clerk. Mr. Goss.
    [No response.]
    The Clerk. Mr. Linder.
    Mr. Linder. No.
    The Clerk. Ms. Pryce.
    Ms. Pryce. No.
    The Clerk. Mr. Diaz-Balart.
    Mr. Diaz-Balart. No.
    The Clerk. Mr. Hastings of Washington.
    Mr. Hastings of Washington. No.
    The Clerk. Mrs. Myrick.
    [No response.]
    The Clerk. Mr. Sessions.
    Mr. Sessions. No.
    The Clerk. Mr. Reynolds.
    Mr. Reynolds. No.
    The Clerk. Mr. Frost.
    Mr. Frost. Aye.
    The Clerk. Mrs. Slaughter.
    [No response.]
    The Clerk. Mr. McGovern.
    Mr. McGovern. Aye.
    The Clerk. Mr. Hastings of Florida.
    Mr. Hastings of Florida. Aye.
    The Clerk. Mr. Chairman.
    The Chairman. No. And the Clerk will report the total.
    The Clerk. Three yeas; seven nays.
    The Chairman. And the motion is not agreed to.
    Are there further amendments?
    Mr. Hastings.
    Mr. Hastings of Florida. Yes, Mr. Chairman, before I offer 
my amendments, I would like to offer an anecdotal situation 
that is related to two of us.
    Judge Pryce and myself have had the responsibility of 
sentencing people at different times during our career. We were 
provided a presentence investigation or probation report. It 
named a lot of things. Generally, before going into the 
sentencing, I read that report; and judges would make a little 
numerical note, some of them, indicating how much they were 
going to sentence the person to after listening to the person 
and their representative. I never did that, and the reason for 
that is I wanted to have someone persuade me to do either more 
or less than what was in the presentence report.
    We have sat here as we sit here all the time. We let these 
people come up here and testify, and then we pass something 
out. My question to you Mr. Chairman, we pass out our rule--and 
I guess it is a governing principle question or process 
question. Do you all meet and discuss all of these amendments 
and then talk about them or do you just come in here and listen 
to these people and somewhere you made a decision as to what 
the rule is going to be?
    Do you understand what I am saying? Is there any--is there 
ever an opportunity for anybody to persuade us to do anything 
different?
    The Chairman. If you are posing a question to me, let me 
explain the process.
    First of all, as the gentleman knows, he is fortunate 
enough to serve in two branches of government. Obviously, the 
legislative branch is certainly quite different than the 
judicial branch; and I don't consider the role of the Rules 
Committee as being anything akin to the judicial branch of 
government.
    This is a law-making body, and the process for determining 
what amendments are made in order is an ongoing order which we 
deal with the Speaker that--you know this is known as the 
Speaker's committee. We have the majority of nine to four, 
which it has been since I have been around and serving as a 
member of both the majority and minority; and members of this 
committee are all given the opportunity to provide their input 
on both sides of the aisle. We structure the rule from the 
recommendations that are provided to us, working closely with 
the Speaker of the House and his staff; and then we come 
forward.
    I will tell you, as I have said on many occasions, I 
myself, having served 14 years as a member of the minority 
party, regularly, regularly pitched to make as much of the 
minority agenda in order for consideration because I feel 
passionate of the Madisonian spirit of minority rights. I will 
admit that sometimes I am more successful than others, but I 
will continue to do that. There are a lot of things that go 
into the consideration of these rules, and obviously the 
presentations that are made by our colleagues are one of those.
    Mr. Hastings of Florida. You know, that is part of the 
problem; and it was like that in the judiciary, too. People got 
accustomed to doing things the same old way, and then they 
couldn't change. I don't care whether it is Democrats or 
Republicans. They were in power, and we were wrong, and now we 
are wrong.
    All I am saying to you is that it doesn't make good sense 
for us to make the decision about stuff--I could ask anybody in 
here to tell me what amendment number 24 is about and whether 
it is a Republican or Democratic amendment. I mean, these are 
serious proposals.
    I am not asking that this be like the judiciary. I 
understand the dynamics perhaps as good or better than you do, 
Mr. Chairman.
    The Chairman. I know you certainly do. You and Ms. Pryce 
have served in both branches.
    The fact is, my opening remarks were that we welcome the 
input of members of the minority and majority. I will tell you, 
as you know, on regular occasions on issues we have listened 
to; and I have tried on occasions to accommodate you every time 
we can. Because, quite frankly, as we have discussed in the 
hearing the other day--we had a lengthy discussion about the 
very narrow majority that we enjoy and the priority that I have 
set forward, and I am proud to be quoted on it. I have the 
responsibility, as do my colleagues, to move our agenda; and we 
are doing that.
    Quite frankly, as we found in the testimony provided here 
today, we are going to do something that has never been done 
before when we, tomorrow on the floor of the House of 
Representatives, pass a measure that will for the first time 
put into place a prescription drug program.
    Mr. Hastings of Florida. I am not quarreling that. I want 
to use Dr. Gingrey's measure because there is not one of us 
that would not have had a hospital that would have benefited 
from what he talked about. Most of us in here don't have a clue 
about market basket. And here is somebody who came in here--and 
what I am saying to you is, I will tell you, after I listened 
to him, I wanted his amendment to be in order not as a 
Democrat, as a citizen of the United States.
    I think it is an abomination when we can't come in here and 
change our minds or you change your mind or you go back to the 
Speaker or all of you go back to the Speaker and all the staff 
and everybody else and say to them, look, we had some people 
come in here with some serious stuff that needs to be talked 
about. If we are going to make up our minds ahead of time, what 
the hell are we up here for? We ought to mail it in.
    I have an amendment.
    The Chairman. Please state the amendment.
    Mr. Hastings of Florida. Amendment number 9 offered by 
Representative Pallone and ask that the amendment be given the 
appropriate waivers. Amendment charges the Secretary of Health 
and Human Services to use the collective purchasing power of 40 
million Medicare beneficiaries to negotiate lower drug prices. 
The Secretary must take into account the goal of promoting the 
development of breakthrough drugs.
    The Chairman. You have heard the motion of the gentleman. 
Any discussion?
    If not, the vote occurs on the Hastings amendment. Those in 
favor will say aye. Those opposed, no.
    Mr. Hastings of Florida. I ask for a roll call.
    The Chairman. The Clerk will call the roll.
    The Clerk. Mr. Goss.
    [No response.]
    The Clerk. Mr. Linder.
    Mr. Linder. No.
    The Clerk. Ms. Pryce.
    Ms. Pryce. No.
    The Clerk. Mr. Diaz-Balart.
    Mr. Diaz-Balart. No.
    The Clerk. Mr. Hastings of Washington.
    Mr. Hastings of Washington. No.
    The Clerk. Mrs. Myrick.
    [No response.]
    The Clerk. Mr. Sessions.
    Mr. Sessions. No.
    The Clerk. Mr. Reynolds.
    Mr. Reynolds. No.
    The Clerk. Mr. Frost.
    Mr. Frost. Aye.
    The Clerk. Mrs. Slaughter.
    [No response.]
    The Clerk. Mr. McGovern.
    Mr. McGovern. Aye.
    The Clerk. Mr. Hastings of Florida.
    Mr. Hastings of Florida. Aye.
    The Clerk. Mr. Chairman.
    The Chairman. No. And the Clerk will report the total.
    The Clerk. Three yeas; seven nays.
    The Chairman. And the motion is not agreed to.
    Are there further amendments? Mr. Hastings.
    Mr. Hastings of Florida. I have an amendment to the rule. I 
move the committee make in order amendment number 5 offered by 
my colleague from Florida, Representative Wexler, and ask that 
the amendment be given the appropriate waivers.
    The amendment creates an affordable, dependable Medicare 
prescription drug benefit structured like Medicare Part B with 
the defined premium and a strong benefit. The bill is paid for 
by freezing or repealing the recent taxcuts which 
disproportionately benefit the wealthiest Americans.
    The Chairman. You have heard the motion of the gentleman. 
Any discussion?
    If not, the vote occurs on the Hastings amendment. Those in 
favor will say aye. Those opposed, no.
    Mr. Hastings of Florida. I ask for a roll call.
    The Chairman. The Clerk will call the roll.
    The Clerk. Mr. Goss.
    [No response.]
    The Clerk. Mr. Linder.
    Mr. Linder. No.
    The Clerk. Ms. Pryce.
    Ms. Pryce. No.
    The Clerk. Mr. Diaz-Balart.
    Mr. Diaz-Balart. No.
    The Clerk. Mr. Hastings of Washington.
    Mr. Hastings of Washington. No.
    The Clerk. Mrs. Myrick.
    [No response.]
    The Clerk. Mr. Sessions.
    Mr. Sessions. No.
    The Clerk. Mr. Reynolds.
    Mr. Reynolds. No.
    The Clerk. Mr. Frost.
    Mr. Frost. Aye.
    The Clerk. Mrs. Slaughter.
    [No response.]
    The Clerk. Mr. McGovern.
    Mr. McGovern. Aye.
    The Clerk. Mr. Hastings of Florida.
    Mr. Hastings of Florida. Aye.
    The Clerk. Mr. Chairman.
    The Chairman. No. And the Clerk will report the total.
    The Clerk. Three yeas; seven nays.
    The Chairman. And the motion is not agreed to.
    Are there further amendments? Mr. Hastings.
    Mr. Hastings of Florida. Three more, Mr. Chairman. I have 
an amendment and move en bloc Cardin number 58, Allen number 
43, Allen number 44, Andrews number 11, Andrews number 12, 
Engel number 39, Engel number 40, Inslee number 23, Inslee 
number 24, Larson number 51, Sanchez number 21, and Tierney 
number 42.
    The Chairman. You have heard the motion of the gentleman. 
Any discussion?
    If not, the vote occurs on the Hastings amendment. Those in 
favor will say aye. Those opposed, no.
    Mr. Hastings of Florida. I ask for a roll call.
    The Chairman. The Clerk will call the roll.
    The Clerk. Mr. Goss.
    [No response.]
    The Clerk. Mr. Linder.
    Mr. Linder. No.
    The Clerk. Ms. Pryce.
    Ms. Pryce. No.
    The Clerk. Mr. Diaz-Balart.
    Mr. Diaz-Balart. No.
    The Clerk. Mr. Hastings of Washington.
    Mr. Hastings of Washington. No.
    The Clerk. Mrs. Myrick.
    [No response.]
    The Clerk. Mr. Sessions.
    Mr. Sessions. No.
    The Clerk. Mr. Reynolds.
    Mr. Reynolds. No.
    The Clerk. Mr. Frost.
    Mr. Frost. Aye.
    The Clerk. Mrs. Slaughter.
    [No response.]
    The Clerk. Mr. McGovern.
    Mr. McGovern. Aye.
    The Clerk. Mr. Hastings of Florida.
    Mr. Hastings of Florida. Aye.
    The Clerk. Mr. Chairman.
    The Chairman. No. And the Clerk will report the total.
    The Clerk. Three yeas; seven nays.
    The Chairman. And the motion is not agreed to.
    Are there further amendments? Mr. Hastings.
    Mr. Hastings of Florida. I have an amendment to the rule. I 
move the committee make in order the amendment number 38 
offered by myself and ask that the amendment be given the 
appropriate waivers. I have explained the amendment and offer a 
unanimous consent request.
    The Chairman. You heard the motion of the gentleman. Any 
discussion?
    If not, the vote occurs on the Hastings amendment. Those in 
favor will say aye. Those opposed, no.
    In the opinion of the Chair the noes have it. The noes have 
it, and the motion is not agreed to.
    Mr. Hastings of Florida. I have one more amendment. I move 
the committee make in order the amendment number 37 offered by 
myself and ask that the amendment be given the appropriate 
waivers. The amendment is a sense of Congress expressing 
support of Federal and State funded in-home care for the 
elderly.
    The Chairman. You heard the motion of the gentleman. Any 
discussion?
    If not, the vote occurs on the Hastings amendment. Those in 
favor will say aye. Those opposed, no.
    In the opinion of the Chair, the noes have it. The noes 
have it, and the motion is not agreed to.
    Are there further amendments? If not, the vote occurs on 
the motion of the gentleman from Atlanta. Those in favor will 
say aye. Those opposed, no.
    In the opinion of the Chair, the ayes have it.
    Mr. Frost. Roll call.
    The Chairman. The Clerk will call the roll.
    The Clerk. Mr. Goss.
    [No response.]
    The Clerk. Mr. Linder.
    Mr. Linder. Aye.
    The Clerk. Ms. Pryce.
    Ms. Pryce. Aye.
    The Clerk. Mr. Diaz-Balart.
    Mr. Diaz-Balart. Yes.
    The Clerk. Mr. Hastings of Washington.
    Mr. Hastings of Washington. Aye.
    The Clerk. Mrs. Myrick.
    [No response.]
    The Clerk. Mr. Sessions.
    Mr. Sessions. Aye.
    The Clerk. Mr. Reynolds.
    Mr. Reynolds. Aye.
    The Clerk. Mr. Frost.
    Mr. Frost. No.
    The Clerk. Mrs. Slaughter.
    [No response.]
    The Clerk. Mr. McGovern.
    Mr. McGovern. No.
    The Clerk. Mr. Hastings of Florida.
    Mr. Hastings of Florida. Nay.
    The Clerk. Mr. Chairman.
    The Chairman. Aye. And the Clerk will report the total.
    The Clerk. Seven yeas, three nays.
    The Chairman. The motion is agreed to.
    Ms. Pryce has been working on this for a long period of 
time, and she will be managing this for the majority and Mrs. 
Slaughter for the minority.
    Let me just say we have two more rules that we are going to 
be considering: the measure on H.R. 2559, the Military 
Construction Appropriations bill. We have no witnesses here. We 
have an open rule that we are going to be having offered by the 
gentleman from Atlanta, Mr. Linder.
    Mr. Linder. Mr. Chairman, I move the committee grant H.R. 
2559, the Military Construction Appropriations Act for fiscal 
year 2004, an open rule providing one hour of general debate 
equally divided and controlled by the chairman and ranking 
minority member of the Committee on Appropriations.
    Under the rules of the House the bill shall be read for 
amendment by paragraph. The rule waives points of order against 
provisions in the bill for failure to comply with clause 2 of 
rule XXI--prohibiting unauthorized appropriations or 
legislative provisions in an appropriations bill. The rule 
authorizes the Chair to accord priority in recognition to 
Members who have preprinted their amendments in the 
Congressional Record.
    Finally, the rule provides one motion to recommit with or 
without instructions.
    The Chairman. You heard the motion of the gentleman.
    Any discussion? Mr. Frost.
    Mr. Frost. I have an amendment. I move the committee make 
in order the amendment offered by Representative Obey and ask 
that the amendment be given the appropriate waivers.
    The Obey amendment would increase the amount of the 
Military Construction Appropriations bill to the level of the 
President's request. This amendment is paid for by reducing the 
average tax cut received by millionaires under H.R. 2 from 
$88,000 to $83,000.
    The Chairman. You heard the motion of the gentleman. Any 
discussion?
    Mr. McGovern. I strongly support the gentleman's amendment. 
We all talk about what a great job our men and women in uniform 
are doing, and this is underfunded and adequately addresses a 
whole range of issues.
    The Chairman. Vote occurs on the Frost amendment. Those in 
favor will say aye. Those opposed, no.
    In the opinion of the Chair, the noes have it. The noes 
have it.
    Mr. Reynolds. Roll call.
    The Chairman. The Clerk will call the roll.
    The Clerk. Mr. Goss.
    [No response.]
    The Clerk. Mr. Linder.
    Mr. Linder. No.
    The Clerk. Ms. Pryce.
    Ms. Pryce. No.
    The Clerk. Mr. Diaz-Balart.
    Mr. Diaz-Balart. No.
    The Clerk. Mr. Hastings of Washington.
    Mr. Hastings of Washington. No.
    The Clerk. Mrs. Myrick.
    [No response.]
    The Clerk. Mr. Sessions.
    Mr. Sessions. No.
    The Clerk. Mr. Reynolds.
    Mr. Reynolds. No.
    The Clerk. Mr. Frost.
    Mr. Frost. Aye.
    The Clerk. Mrs. Slaughter.
    [No response.]
    The Clerk. Mr. McGovern.
    Mr. McGovern. Aye.
    The Clerk. Mr. Hastings of Florida.
    Mr. Hastings of Florida. Yes.
    The Clerk. Mr. Chairman.
    The Chairman. No. And the Clerk will report the total.
    The Clerk. Three yeas; seven nays.
    The Chairman. And the motion is not agreed to.
    Are there further amendments? If not, the vote occurs on 
the motion of the gentleman from Atlanta. Those in favor will 
say aye. Those opposed, no.
    In the opinion of the Chair, the ayes have it. The ayes 
have it. Mrs. Myrick will be managing this rule for the 
majority.
    Mr. Frost. Mr. McGovern for the minority.
    The Chairman. Our final rule, as we discussed at the 
subcommittee hearing committee that Mr. Linder presided over, 
we will be allowing for the consideration of motions to suspend 
the rules on Wednesdays through this Congress.
    Chair will be in receipt of a motion.
    Mr. Linder. Mr. Chairman, I move the committee report a 
resolution providing that during the remainder of the One 
Hundred Eighth Congress the Speaker may entertain motions that 
the House suspend the rules on Wednesdays as though under 
clause 1 of rule XV.
    The Chairman. You heard the motion of the gentleman. Any 
discussion?
    If not, the vote occurs on the gentleman's motion. Those in 
favor will say aye. Those opposed, no.
    In the opinion of the Chair, the ayes have it. The ayes 
have it, and Mr. Linder will be managing this rule for the 
majority.
    Mr. Frost. Mr. McGovern for the minority.
    The Chairman. And Mr. McGovern for the minority.
    Thank you all very much for being here. We thank you very 
much. We appreciate that, and we will see you all in a very 
short period of time.
    The committee stands adjourned.
    [Whereupon, at 5:10 a.m., the committee was adjourned.]
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